The Dutch legislator has provided more clarity on further transparency of UBO information based on EU 4th Anti Money Laundering Directive.
On 31March 2017 the draft bill on the implementation of the Ultimate Beneficial Owner (UBO) register in The Netherlands was presented for public consultation. The bill seeks to implement the obligation to maintain a central register with information on the ultimate beneficial owners of legal entities based in the Netherlands and finds its origin on the obligation contained in the EU 4th Anti Money Laundering (AML) Directive (European Directive 2015/849).
EU member states require countries to implement related legislation no later than 26 June 2017. The UK and Ireland have implemented legislation, the Netherlands made the first step and other EU member states are expected to follow with similar bills on implementation in the coming months.
Here is a brief summary of the most important consequences if the bill is introduced in its current form.
Which entities need to register?
Companies and legal entities established in The Netherlands and legal entities with a registered office in The Netherlands need to register UBO information in line with the entities that have to register at the Chamber of Commerce according to the Commercial Register Act 2007.
Not complying with the requirement will be seen as an economic crime.
Where to register and how is access controlled?
In the Netherlands the Chamber of Commerce would be appointed as the registrar of UBO information. The Netherlands chose for a public register allowing, in principle, everyone to access the basic information set if the party requiring access is registered and pays a small fee. Certain authorities will have access to a bigger set of data.
Which information is to be filed?
The Dutch Bill follows the EU 4th AML directive and the following information will be made public:
- Month of birth
- Year of birth
- Country of residence
- Nature and extent of the beneficial interest held.
The following information is required to be filed, but will only be made available to specific authorities:
- Name, Date of birth, place of birth and country of birth
- If possible, the Citizen Service Number (BSN) and/or foreign tax identification number
- Copy of the document verifying the identity of the shareholder
- The exact size of the (economic) interest of the UBO
- Documentation substantiating why a person has the status of UBO and the size of the corresponding (economic) interest.
Definition of a UBO?
An Ultimate Beneficial Owner is defined as an individual who is the ultimate owner of or has control over a company or legal entity. The Dutch legislator is not specific about the percentage of shareholding or control. In previous publications a percentage of 25% of shareholding is mentioned. It is expected the regulatory will clarify the UBO definition and the exact percentage in a separated memo.
Local legislation needs to be implemented no later than 26 June 2017 pursuant to the 4th AML Directive. Companies and legal entities already registered with the Dutch Chamber of Commerce have 18 months after the implementation to register their UBO information.