The fourth EU anti-money laundering directive was adopted on 20 May 2015 and must be implemented in national law by no later than 2017. In the Netherlands, its provisions will be mostly incorporated in the Money Laundering and Terrorist Financing Prevention Act (Wwft). The changes will affect the privacy of, in particular, major shareholders of family businesses and other companies. This is because companies will be required to disclose the details of their ultimate beneficial owners (UBOs) in a central register.
In a parallel development, a draft bill now in the consultation phase will require the establishment of a central shareholders' register (in Dutch: CAHR) for private limited liability companies (BVs) and unlisted public limited liability companies (NVs) as well as unlisted European companies (SEs) and European cooperative societies (SCEs) which have their corporate seat in the Netherlands. Details of holders of registered shares in these entities will have to be included in this register.
The accessibility of the UBO register and the details to be included
Under the directive it is in any event clear that the UBO register will be accessible to the "competent authorities", which in the Netherlands will include the Dutch Central Bank (DNB), the Financial Supervision Office (the BFT) and the Authority for the Financial Markets (the AFM). "Obliged entities", such as banks, auditors, lawyers and civil law notaries, will also have access to the register within the framework of the customer due diligence they are required to perform. A point of uncertainty and concern is the last category of those with access to the UBO register, i.e. "any person or organisation that can demonstrate a legitimate interest". (Note that they will not have access to the details of UBOs of trusts.) Various EU publications mention investigative journalists as a category with access to the UBO register, but a further explanation has yet to be provided. By consulting the register, these parties will find out not only a beneficial owner's name, month and year of birth, nationality and country of residence but also the nature and size of his/her interest. A corollary question is of course how this information may be used and whether it may be made public, for example in news reports. Under the directive, EU member states are allowed to deny access to persons with a legitimate interest in exceptional circumstances, such as where such access would expose the beneficial owner to the risk of fraud, kidnapping, blackmail, violence or intimidation or where the beneficial owner is a minor. In such cases, however, the burden of proof rests on the beneficial owner.
The accessibility of the CAHR and the details to be included
With regard to the CAHR, there are still many unanswered questions. This is because the draft bill leaves several issues to be covered by governmental decree and a draft of that decree has not yet been released. These issues include: (i) the parties that will have access to the CAHR, (2) the details to be contained in the register, (3) the events that the notary must register and (4) the manner and timing of registration. Some answers have been provided by the legislator, such as the details to be contained in the register. For the time being, the CAHR will not contain the details of depositary receipt holders and will not automatically give information about the UBOs. In any event, its accessibility will be more limited than that of the UBO register.
Click here for a chart comparing the two registers based on the information currently available. We will keep you informed of new developments regarding these registers and, in particular, their consequences for your privacy.