With a view to preventing money-laundering, tax evasion and other criminal activities, new regulations aim to ensure that the individuals who ultimately own or control Irish companies (“Beneficial Owners”) are identified and monitored.

The details of these individuals need to be kept on an internal register by each company and filed on a central register maintained by the Companies Registration Office.

Failure to comply with the regulations is a criminal offence.

Since 15 November 2016 some companies now need to make sure that they have identified, and thereafter monitor, the people with ultimate direct or indirect ownership or control to ensure that they are in compliance with new regulations.

The Regulations

The European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations, 2016 commenced in Ireland on 15 November 2016 to give effect to certain provisions of the EU’s Fourth Anti-Money Laundering Directive. The purpose of the regulations is to require “corporate or other legal entities incorporated in the State to obtain and hold adequate, accurate and current information in respect of its beneficial owners” and to ensure that individuals who directly or indirectly own Irish companies are identified.

Does this apply to you?

The regulations apply to all companies and other legal entities incorporated in Ireland. This is subject to certain limited exceptions for companies that are listed and/or subject to equivalent international transparency standards. It is expected that similar arrangements will be introduced in due course for trusts.

What is a beneficial owner?

A beneficial owner of a company is any individual who ultimately owns or controls the company through ownership of a sufficient percentage of shares, voting rights, ownership interest or other means (such as the power to appoint senior management). Currently, 25% is the threshold set for a sufficient percentage. This applies to direct and indirect ownership, meaning it includes any interest held through corporate vehicles under the control of the individual.

What is expected of you?

All relevant companies are required to take all reasonable steps to identify their beneficial owners and obtain certain information relating to such persons: name, address, date of birth, nationality, nature and extent of interest and relevant dates for holding that interest. With effect from 15 November 2016, this information must be maintained by the company in an internal beneficial ownership register as well as filing it at the CRO.

The steps to be taken by relevant companies include contacting and requesting information from any person whom the company has reasonable cause to believe is a beneficial owner. These persons are required, within one month, to respond to these requests and to notify the relevant company of any change in ownership or other relevant information.

The regulations also oblige any person who knows (or ought reasonably to know) that he/she is a beneficial owner to notify the relevant company of that fact.

Companies and individuals that fail to comply with the regulations commit an offence and can be found liable, on summary conviction, to a fine of up to €5,000.

Will the information be made public?

Information regarding the beneficial ownership of each company will be held in a central register maintained by the Companies Registration Office (CRO). This is expected to be in place in Q4 2017.

It remains to be seen who will have access to the central register. While the EU Directive did not originally envisage public access, an amendment to the Directive has been proposed to grant wider public access to the central CRO register to facilitate greater public scrutiny. It is not therefore clear at this stage to what extent this central CRO register will be generally available to the public.