On May 20, 2015, the fourth Anti-Money Laundering Directive was adopted by the European Parliament and the Council.
In execution of this European measure, the Belgian government has adopted a preliminary bill on March 31, 2017. This preliminary bill introduces a UBO register in which the ultimate beneficiaries of companies and other legal entities need to be identified.
1. Principles of the Directive
1.1. UBO register
Pursuant to the fourth Anti-Money Laundering Directive, by June 26, 2017 at the latest, all member states need to adopt a central register (hereafter “UBO register”) in which the ultimate beneficial owner (hereafter “UBO”) of companies and other legal entities is identified.
The Directive lays down minimum requirements for the UBO register. Every member state determines the specific implementation of the UBO register.
In implementation of the Directive, the Belgian government has adopted a preliminary bill on March 31, 2017.
In the Belgian UBO register, the UBO’s need to be identified of companies and other legal entities that are established in Belgium.
1.2. Who is UBO?
UBO’s are the natural persons who ultimately own or control a legal entity through direct or indirect ownership of a sufficient percentage of shares, voting rights or ownership interest in that legal entity.
The Directive considers this condition fulfilled when the natural person owns more than 25% of the shares, voting rights or ownership interest in the legal entity. Member states are allowed to lower this percentage.
If it is not possible to identify the aforesaid beneficial owners, the natural persons who hold the position of senior management officials will be identified as UBO’s.
If the legal entity concerns a trust, both the settlor, the trustees, the protector, the beneficiaries and any other natural person exercising ultimate control over the trust are identified as UBO’s. The same applies to other legal entities that are comparable to trusts, such as for example foundations.
1.3. What data will be included in the UBO register?
The UBO register needs to hold adequate, accurate and current information on the UBO, including the details of the beneficial interests held.
From the Directive it can be deducted that the UBO register should at least include the name, the month and year of birth, the nationality and the country of residence of the beneficial owner, as well as the nature and the extent of the beneficial interest held.
1.4. Who has access to the UBO register?
Competent authorities of the member states and the Financial Intelligence Units have unrestricted access to the UBO register. Financial Intelligence Units are independent institutions that are responsible for the collection, the analysis and the exchange of information on money laundering and terrorist financing.
Further, obliged entities can consult the UBO register within the framework of their costumer due diligence. Obliged entities are, amongst others, financial institutions, independent legal professionals, estate agents, …
Finally, the register is accessible to all persons and organisations that can demonstrate a legitimate interest. These interested parties shall access at least the name, the month and year of birth, the nationality and the country of residence of the beneficial owner as well as the nature and the extent of the beneficial interest held.
Member states are only in exceptional circumstances allowed to provide for an exemption to the access to the UBO register for certain obliged entities and parties that can demonstrate a legitimate interest.
2. Implementation in the Belgian legislation
The Belgian government has adopted a preliminary bill on March 31, 2017. The preliminary bill is submitted to the council of state for an advisory opinion. Afterwards, the bill will be introduced into Parliament. The Parliament needs to adopt the bill.
From the bill that will be introduced into Parliament, it will become clear how Belgium will actually implement the UBO register.
3. Developments in other home markets – The Netherlands, Luxembourg and Switzerland
In The Netherlands a draft bill has been made public on March 31, 2017. The Dutch government has opened a public internet consultation, that allows interested parties to react on the draft bill. Click here for more information.
Luxembourg has not yet published a draft bill on the implementation of the UBO register in the national legislation.
As a non-EU member state, Switzerland is not subject to the Directive and will therefore not have a UBO register.
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Pursuant to the Directive, the UBO register needs to be established in the members states on June 26, 2017 at the latest.