If you’ve been involved in the funds industry, you will be well aware of the ever-increasing focus on anti-money laundering and “know your customer” requirements by national and supranational regulatory bodies alike. In fact, the Central Bank of Ireland (Central Bank) has consistently listed anti-money laundering as an enforcement priority every year since 2012.
A new addition to these obligations is the implementation of the European Union (Anti-Money Laundering: Beneficial Ownership and Corporate Entities) Regulations 2016 (Regulations), which implemented Article 30 of the Fourth Anti-Money Laundering Directive EU 2015/849 (4 AMLD) and which took effect in Ireland on 15 November 2016. As of that date, all companies and legal entities established in Ireland (Companies and each a Company) were required to take all reasonable steps to gather and maintain adequate, accurate and current information of their “beneficial owners” on an internal beneficial owner register (Internal Register).
The Regulations dealt with one aspect of 4 AMLD which was due to be transposed into Irish law in full by 26 June 2017. Meanwhile, a proposal for a Fifth Anti-Money Laundering Directive (5 AMLD) which will amend 4 AMLD is at an advanced stage and is currently scheduled to be discussed by the EU Parliament later this year. It is likely therefore, that the remainder of 4 AMLD will not be implemented into Irish law until the proposals for 5 AMLD are settled, although EU Member States will be required to enable public access to information about the beneficial ownership of companies from 1 January 2018.
The requirement to maintain an Internal Register is the first of a two-stage process required by all EU Member States in relation to putting in place national provisions around beneficial ownership information. In due course, all Companies will also be required to file this information with a central beneficial ownership register (Central Register) which for corporate entities is in the process of being established by the Companies Registration Office (CRO) and is expected to be populated in Q4, 2017. By implementing the Regulations, Ireland adopted an early implementation approach to Article 30 of 4 AMLD to allow entities an appropriate lead in time to gather the necessary data required in order to complete the information required for the Central Register.
The Regulations do not provide for any transitional arrangements and, therefore, all Companies were expected to be in compliance of the requirement to maintain an Internal Register as of 15 November 2016.
For a number of reasons which are set out in this OnPoint, it is proving difficult from a practical perspective for Irish funds to achieve compliance with the requirement to maintain an Internal Register.