Many Irish corporate entities are, since 15 November 2016, required to maintain registers containing their respective beneficial ownership information under the EU (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2016 (the “2016 Regulations”).
This requirement is now restated and supplemented in the recent EU (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019 (the “Regulations”) which comprise two principal parts:
(a) Part 2 revokes and restates the 2016 Regulations, with some amendments, with effect from 22 March 2019; and
(b) Part 3 requires a relevant entity to file its beneficial ownership information with a Central Register: this requirement will come into effect on 22 June 2019 and relevant entities must file this information within a further 5 month period (ie by 22 November 2019).
Beneficial Ownership Register
The Regulations revoke and restate the 2016 Regulations with some amendments that:
- require a relevant entity to take reasonable steps to obtain and hold the Personal Public Service Number (“PPS number”) of each of its beneficial owners to whom one is issued;
- require a relevant entity to provide timely access on request to its beneficial ownership register to the Garda Síochána, the Revenue Commissioners, a competent authority, the Criminal Assets Bureau or an inspector appointed under the Companies Act 2014 (the “Act”)(to investigate the true persons financially interested in a company);
- allow any of these public bodies listed above, to whom the relevant entity discloses its beneficial ownership register, to further disclose this information to any corresponding competent authority of another member state;
- require a relevant entity, in certain cases, to disclose to a designated person1 information on the beneficial ownership register when it enters into an occasional transaction (a transaction in relation to which the designated person is required to apply customer due diligence measures2) or forms a business relationship with a designated person; and
- extends potential liability for breach by the relevant entity of certain obligations under the Regulations to include liability on conviction on indictment to a fine of up to €500,000.
The Central Register
Part 3 of the Regulations imposes an obligation on a relevant entity to file its beneficial ownership information in the Central Register to be maintained by the Registrar of Beneficial Ownership of Companies and Industrial Provident Societies (the “Registrar”). The Regulations envisage that the Registrar be appointed by the Minister for Enterprise, Business and Innovation. It is anticipated that the Registrar of Companies of the Companies Registration Office will be so appointed.
Initial Central Register Filing Obligation
Under Part 3, a relevant entity that:
- is in existence before 22 June 2019 must deliver its beneficial ownership information to the Registrar within 5 months from that date (ie 22 November 2019);
- comes into existence on or after 22 June 2019 must deliver its beneficial ownership information to the Registrar within 5 months from its date of incorporation.
The beneficial ownership information to be provided to the Central Register includes:
- each beneficial owner’s name, date of birth, nationality, and residential address;
- a statement of the nature and extent of the interest held, or the nature and extent of control exercised by each beneficial owner;
- the relevant entity’s name and number as they appear on the relevant entity’s register (maintained under the Act or the Industrial and Provident Societies Acts, as applicable); and
- for verification, the PPS number of each of the relevant entity’s beneficial owners to whom one is issued.
The Regulations provide that the relevant entity will provide such other information as the Registrar may determine. Further, additional information may be required depending upon whether the beneficial ownership information is delivered to the Registrar by the relevant entity, acting through its officer or employee, or by a person acting on behalf of the relevant entity (referred to in the Regulations as “the presenter”). With regard to the PPS number of a beneficial owner which is delivered to the Registrar, the Regulations provide that the Registrar shall not disclose that number. The Regulations further provide that the Registrar can only store a version (a “hashed version”) of the number from which it is not possible to determine the actual PPS number.
The Regulations impose an obligation on the relevant entity to keep the information in its beneficial ownership register aligned with the information that the relevant entity has filed with the Registrar in the Central Register. The relevant entity must deliver any changes in the relevant entity’s beneficial ownership information to the Registrar so as to allow the Central Register to be amended with the corresponding changes. The Regulations refer to this as the “follow up obligation” and prescribe the process and requirements for compliance with it.
Access to the Central Register
The Central Register can be inspected by certain members of the Garda Síochána, the Revenue Commissioners, FIU Ireland, the Criminal Assets Bureau and members or staff of a competent authority engaged in the prevention, detection or investigation of possible money laundering or terrorist financing. The ranking and authorisation requirements of those who can inspect the Central Register are prescribed in detail in the Regulations.
A designated person will have a right of access to some information in the Central Register when the relevant entity enters into an occasional transaction (a transaction in relation to which the designated person is required to apply customer due diligence measures) or forms a business relationship with a designated person. In such a case, the designated person can access each beneficial owner’s name, month and year of birth, country of residence and nationality and a statement of the nature and extent of the interest held, or the nature and extent of control exercised of each such beneficial owner.
A member of the public may also inspect similar information as the designated person (above) may inspect. The right of access of both designated persons and the public is restricted in certain cases. For example, where the beneficial owner is a minor, then the person seeking access will need to provide the Registrar with further information as to why that person considers it is in the public interest that the information be disclosed to him or her. In addition, the Registrar may require the person to pay a fee in respect of the access provided.
Failure to company with the Regulations
A relevant entity that fails to comply with its obligations, including failing to deliver the prescribed beneficial ownership information to the Registrar or failing to provide updated information for the purposes of the Central Register, commits an offence and is liable on summary conviction to a class A fine (not greater than €5,000), or on conviction on indictment, to a fine not exceeding €500,000.
Interconnection of Central Registers
The Regulations provide that the Registrar shall arrange for the connection of the Central Register with central registers in other member states, as provided for by the EU’s Fifth Money Laundering Directive 2018/843.