The Companies Act (Register of Beneficial Owners)(Amendment) Regulations (the “Amendment Regulations”) came into force on 12 July 2019 save for one provision which comes into force on 1st January 2020 as shall be seen below. These Amendment Regulations serve to amend the Companies Act (Register of Beneficial Owners) Regulations which had come into force on 1st January 2018 (the “Regulations”). Information on the scope of the Regulations is available here.
The Amendment Regulations introduce changes to the Regulations which, inter alia, seek to transpose certain provisions of the Fifth EU Anti-Money Laundering Directive (the “5AMLD”) into Maltese law.
The Amendment Regulations now place a clearer burden on beneficial owners themselves to provide information to Maltese companies in which they hold a beneficial interest. It is now clear that those natural persons, who have reasonable cause to believe that they are beneficial owners of a company, shall be bound to provide the information required in terms of the Regulations to the company without the need for the company to first request this of them. The company however still has its own obligation to obtain such information from shareholders or other natural persons who it believes to be beneficial owners. This new provision seems to further recognise that ultimately it is the responsibility of the beneficial owners themselves to provide the required information and ensure that the company in which they hold beneficial interests is in compliance with the Regulations. This backs up the already existing penalties applicable to beneficial owners in terms of the Regulations where they would have failed to provide a company with information it would have requested. Now, it appears that they are liable to penalties also where they fail to voluntarily provide the information even without request from the company.
The 5AMLD has served to extend accessibility to beneficial ownership information in respect of various entities. In so far as companies are concerned, where access was already quite wide when compared to other types of structures such as trusts, the 5AMLD now obliges member states to make the information on the beneficial ownership of companies registered therein freely accessible by members of the general public – the widest level of access. Accordingly, Regulation 7 of the Regulations now provides that members of the general public are to also have access to beneficial ownership information of companies but only to the name, the month and year of birth and the country of residence and nationality of the beneficial owner as well as the nature and extent of the beneficial interest held. This specific amendment will only come into force on the 1st January 2020. Access to beneficial ownership information may be partially or fully restricted where it is shown, by means of documentary evidence, that such access would expose the beneficial owner to disproportionate risk, risk of kidnapping, blackmail, extortion, harassment, violence or intimidation or where the beneficial owner is a minor or otherwise legally incapable. However access to beneficial ownership information may in any case not be restricted for credit and financial institutions or to subject persons (as this term is defined in the Prevention of Money Laundering and Funding of Terrorism Regulations, S.L.373.01 of the Laws of Malta).
The Amendment Regulations have granted the Registrar of Companies a new power which entitles him to make enquiries with the company (including through on-site inspections of the company’s books at its registered office) in order to establish the current beneficial ownership of a company if he has reasonable cause to believe that the beneficial ownership information submitted to him is not accurate or up to date. The Amendment Regulations have also introduced a new obligation on national competent authorities with designated responsibilities for combating money laundering and terrorist financing and on subject persons to report to the Registrar of Companies any discrepancies they find between the beneficial information available to them and the beneficial information held in the register of beneficial owners kept by the Malta Business Registry. Until such discrepancies are resolved, the Registrar of Companies may make reference to such discrepancies in the register of beneficial owners. Should the Registrar determine the need to update the information on the beneficial owners of the company following any such enquiry or report, each officer of the company shall be liable for a penalty not exceeding €10,000.
Finally the Amendment Regulations have now included a provision in the Regulations which clearly specifies that once a company has been struck off the register, the information on the beneficial ownership of that company will remain available on the Malta Business Register and the interconnected system of central, commercial and companies registers, composed of the registers of Member States and EEA States, for a period of five years from the date of striking off.