The EU Anti-Money Laundering Directive has created new rules that require companies to gather and store information about their beneficial owners. The regulations have introduced a two stage process:
- Companies are currently required (as of the 15th of November 2016) to maintain current accurate information on their beneficial owners on an internal register.
- The establishment in the near future of a central register, to be called the Registrar of Beneficial Ownership of Companies and Industrial and Provident Societies, which will be administered by the Companies Registration Office.
Failure to comply with the requirements is a criminal offence which can lead to a fine of up to €5,000 on summary conviction.
Who are Beneficial Owners?
A beneficial owner is the individual who ultimately owns or controls a company through direct or indirect ownership of a sufficient percentage of the shares or voting rights or ownership interest in that company.
A shareholding of 25 % plus one share or an ownership interest of more than 25 % in a company held by an individual is an indication of direct ownership. A shareholding of 25 % plus one share or an ownership interest of more than 25 % held by a separate company, which is under the control of an individual is an indication of indirect ownership.
Requirement for Companies to Hold Information
Since the 15th of November 2016 Companies have been required to hold the following information:
- The name, date of birth, nationality and residential address of each beneficial owner.
- A Statement of the nature and extent of the interest held by each beneficial owner.
- The date on which each person entered the register and the date on which any person ceased to be a beneficial owner.
The information must be up to date, clear and accurate. Companies are obliged to serve notices requesting information on persons they suspect to be beneficial owners and persons who receive these notices have one month in which to reply. There is an independent duty on beneficial owners to notify the company if there is a change of their status. If a company cannot locate its beneficial owners then it must instead enter the details of its senior managing officials.
Companies should be proactive in maintaining their own registers in the lead up to the creation of the central register.
Central Registrar of Beneficial Ownership
The Department of Finance is expected to introduce the Register of Beneficial Ownership of Companies in the fourth quarter of 2017. This will require Companies to file their internal registers of beneficial owners, as well as the details of the person who makes the submission on behalf of the company, with the Companies Registration Office.
Although the exact rules have not been finalised the Companies Registration Office has indicated that there will likely be a three month grace period before companies will be found to be in breach of the statutory duty to file. The filing is to be done through an online portal without the need for filing fees. Under the current directive the public would not have access to the information but the issue of public access is being debated and may form part of future regulations.