The Luxembourg law of 13 January 2019 (the “UBO Law”) creating a Luxembourg Register of Ultimate Beneficial Owners (the “UBO Register”) as well as the relating Grand-Ducal Regulation of 15 February 2019 (the "Regulation") will enter into force on 1 March 2019.
The UBO Law implements article 30 of the European Directive (EU) 2015/849, as amended by European Directive (UE) 2018/843, on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing. It is organised in three parts:
- First, the functioning of the register (technical aspects, information to be stored, access rights),
- Second, the obligations for legal entities to file, store, update and share information on their own beneficial owners, and
- Third, the criminal sanctions in case of non-compliance.
The UBO Register is an electronic register administered by the Luxembourg Business Registers (the “Administrator”), which is also already in charge of the administration of the Luxembourg trade and companies’ register (the "RCSL").
- Who has to proceed with the registration for the UBO Register?
- Who is an UBO?
- What information on the UBOs has to be disclosed?
- Who has access to the information filed with the UBO Register?
- Are you able to limit access to the information filed with the UBO Register?
- What does this mean for the ultimate beneficial owners of the Registered Entities?
- What is the procedure for the filing?
- What are the costs linked to the UBO Register?
- When do you have to be ready?
- What are the sanctions if the Registered Entities don’t comply?
- What changes for professionals subject to the Luxembourg law of 12 November 2004 on the fight against money laundering and terrorist financing (the "Professionals"), i.e. banks, notaries, trust companies, lawyers,…?
- What you should do?
- How can we help you?
Who has to proceed with the registration for the UBO Register?
With the exception of certain listed entities (which have their own set of transparency rules), all entities falling under article 1 items 2 to 15 of the Luxembourg law of 19 December 2002 on the Luxembourg trade and companies’ register - meaning all companies registered with the RCSL including investment funds (with the exception of merchants acting as physical persons in their own name) – (the "Registered Entities" or, individually a "Registered Entity") will have to share information about the natural persons who ultimately own the entity or otherwise exercise control over the management of the entity, their ultimate beneficial owners ("UBOs" or, individually an "UBO") and make sure to store a copy of the information and relevant documentation at their registered office.
Any legal entity, listed on a regulated market in the Grand Duchy of Luxembourg or any other state of the European Economic Area (EEA) or any other state which is subject to disclosure requirements similar to European Union law or subject to equivalent international standards which ensure adequate transparency, only list the name of the regulated market on which their securities are admitted to trading*.
In case of a liquidation, the Registered Entity has to publish the address where the information and documentation on the UBOs will be stored for the following 5 years.
Who is an UBO?
The UBOs are defined in the UBO Law by reference to the "beneficial owner" as defined in article 1, item 7 of the law of 12 November 2004 on the fight against money laundering and terrorist financing, as amended (the "2004 Law")**.
In practice, the information and documentation to be filed with the UBO Register shall basically be the same as those requested from legal entities by banks when opening a new account, notaries for any notarial deed or whenever entering into a business relationship with a professional subject to the 2004 Law.
What information on the UBOs has to be disclosed?
- Last name
- First names
- Birth date
- Place of birth
- Country of residence
- Private (or professional) address
- Luxembourg or foreign identification number, as applicable
- Nature and extent of the effective interests held in the Registered Entities
(these items are together referred to as the "UBO Information").
Article 5 of the Regulation provides the list of supportive documentation which shall be uploaded to the UBO Register:
- For natural persons which are not registered with the RCSL: official identification documents of the UBO with a translation into Luxembourg, German or French language if such documents are not drafted in roman characters ;
- As the case may be, the request relating to limited access to the information, as explained below ;
- As the case may be, any official documentation which proves that the legal entity is a listed entity as defined above.
Who has access to the information filed with the UBO Register?
The Luxembourg national authorities, as defined in the UBO Law, have full access to all information registered with the UBO Register. Such authorities include, among others, the Cellule du Renseignement Financier (CRF), the Commissariat aux Assurances (CAA), the Luxembourg Tax Authorities (Administration des douanes et accises, Administration de l’enregsitrement, des domains et de la TVA and Administration des contributions directes) as well as public prosecutors and investigative judges.
Other persons may also access to UBO Register but, in principle, only the last name, first name, nationality, date of birth, place of birth, country of residence and the nature and extent of ownership of the UBOs would be accessible, excluding address and national identification number, which are considered as sensitive information.
The access to and consultation of UBO Register and information therein will be done through secured authentication.
Are you able to limit access to the information filed with the UBO Register?
UBOs can request for their information not to be shared with the public, if this disclosure would be a major threat to their personal security (kidnapping, extorsion,…). Upon introduction of the request, the Administrator has to temporarily limit the access to the information as long as its decision is pending. If the Administrator agrees to restrict the disclosure, this restriction is valid for 3 years and only national authorities, credit institutions, notaries and hussiers de justice acting in specific capacities, would be able to access the information.
If the request is not granted, there are two recourse options:
- an ex gratia appeal (recours graçieux de droit commun);
- a judicial appeal that must be lodged within 15 days of the publication of the decision
The access to the relevant information remains limited until the last appeal is dismissed.
What does this mean for the ultimate beneficial owners of the Registered Entities?
The UBOs have to provide the Registered Entities with any information necessary for them to comply with the requirements of the UBO Law. The Registered Entities are liable to keep the UBO Information available at their registered office and to file the relevant information with the UBO Register.
What is the procedure for the filing?
The Administrator is in charge of collecting, managing, storing and making available the UBO Information.
The communication between the Administrator and the Registered Entities or their representatives as well as the consultation will happen exclusively electronically. The Administrator will not accept any incomplete request for registration submitted by the Registered Entities or their representatives. In case of refusal the Registered Entity will have 15 days to comply.
If, by that time, the Registered Entity has not provided the missing information, the Administrator will refuse the registration and motivate its decision. The Registered Entity has a right of recourse and can start a summary proceeding (procedure de référé).
What are the costs linked to the UBO Register?
Filings (registration or amendments) cost 15 EUR (excl. VAT) which is less than the average filing cost for annual accounts with the companies register. For priority filings a 100 EUR (excl. VAT) fee is added.
Excerpts in electronic format (5 EUR excl. VAT) and hard copy (10 EUR excl. VAT) cost around the same as an average consultation of the companies register.
When requesting a derogation, an additional fee of 200 EUR (excl. VAT) is added to the regular filing fee.
It should be noted that entities already subject to the UBO Law are exempt from the payment of the administrative fees mentioned above for a period of 6 months after the entry into force of the Regulation on 1 March 2019, i.e. until 31 August 2019.
When do you have to be ready?
The UBO Law enters into force on 1 March 2019, i.e. the first day of the second month after its publication in the Luxembourg Official Journal (Mémorial A).
The Registered Entities have until 31 August 2019 (i.e. 6 months after entry into force of the law) to comply with the requirements of the UBO Law.
We remind you that during this initial compliance period, the filings with the UBO Register are for free.
What are the sanctions if the Registered Entities don’t comply?
Not providing or updating the UBO Information in time, knowingly providing incomplete or incorrect information or not storing the documentation at the registered office may result in criminal fines ranging from 1,250 EUR to 1,250,000 EUR.
It has to be noted here that the UBO Law implements for the first time this obligation for the Registered Entities to keep themselves at their registered office all the UBO Information regarding their UBOs.
What changes for professionals subject to the Luxembourg law of 12 November 2004 on the fight against money laundering and terrorist financing (the "Professionals"), i.e. banks, notaries, trust companies, lawyers,…?
Easier UBO identification?
The information made available through the UBO Register would be accessible through the UBO Register, which should simplify the client due diligence process and allow a vaster access to the information. However, the Professionals are not allowed to solely rely on the information published in the UBO Register and have to conduct additional enquiries/investigations in order to comply with their client due diligence requirements.
Registered Entities have to share the UBO information and relevant documentation within 3 days upon motivated request by a Professional.
Professionals (and any other person with access to the UBO Register) have to notify the Administrator within 30 days, if they are aware that the information published is incomplete or incorrect.
What you should do?
At this date, the UBO Information cannot yet be uploaded to the UBO Register and the relevant filing forms are not yet available. However, the Registered Entities shall start gathering the UBO Information in order to set up their file of information and documents of proof which they are required to (a) keep at the registered office and (b) file with the UBO Register.
For each UBO it needs to be assessed carefully if the disclosure the UBO Information would be a major threat to its personal security. If this is the case a request to restrict the access to the information would need to be prepared.
How can we help you?
We can assist you in complying with the requirements of the UBO Law and notably in (a) determining who are the UBOs of your Registered Entity based on the structure chart and other information you may provide to us, (b) determining what information has to be filed as elements of proof on the UBOs and (c) proceeding with the filing of the information with the UBO Register.