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Article 30 of the 4th EU Anti-Money Laundering Directive (4AMLD) requires all EU Member States to put into national law provisions around beneficial ownership information for corporate and legal entities.
There are two stages to this process:
1) As of 15th November 2016 corporate and legal entities must hold adequate, accurate and current information on their beneficial owner(s) in their own beneficial ownership register (see below)
2) Corporate and legal entities will in due course be required to file this information with a central beneficial ownership register. The central register is in the process of being established.
This has placed additional obligations on Irish corporate entities and shareholders that should not be ignored. Since 15 November 2016, all Irish companies and other legal entities incorporated in Ireland (other than listed plcs that already report under the Transparency regime or entities which are subject to equivalent international standards) are obliged to take all reasonable steps to hold adequate, accurate and current information on their ultimate beneficial owner(s). That information must be kept on – the beneficial ownership register.
MEANING OF BENEFICIAL OWNER
In the regulations, ‘beneficial owner’ is given the meaning provided by Article 3(6) (a) of the 4AMLD, which sets out how beneficial ownership should be determined, so as to identify the natural person or persons ultimately controlling a legal entity through direct or indirect ownership of a sufficient percentage of the shares or voting rights or ownership interest in that entity. A shareholding of 25 % plus one share or an ownership interest of more than 25 % in the customer held by a natural person shall be an indication of direct ownership. A shareholding of 25 % plus one share or an ownership interest of more than 25 % in the customer held by a corporate entity, which is under the control of a natural person(s), or by multiple corporate entities, which are under the control of the same natural person(s), shall be an indication of indirect ownership (see appendix for full text of Article 3(6) (a) (i))
INFORMATION TO BE HELD BY COMPANIES
(1) the name, date of birth, nationality and residential addresses of each beneficial owner of it (the beneficial owner must be a natural person);
(2) a statement of the nature and extent of the interest held by each such beneficial owner;
(3) the date on which each natural person was entered into the register as a beneficial owner of it;
(4) the date on which each natural person who has ceased to be a beneficial owner of it ceased to be such an owner;
(5) if, having exhausted all possible means and provided there are no grounds for suspicion by the company, no natural persons are identified, or there is any doubt that the persons identified are the beneficial owners, there shall be entered in the register the names of the natural person(s) who hold the position of senior managing official(s) of the company (including their date of birth, nationality and residential addresses). In this case, a company shall keep records of the actions taken in order to identify the beneficial ownership of it.
WHEN WILL THIS HAVE TO BE PREPARED
The CRO has state that they expect a minimum three-month grace period in which companies can file the required information without being in breach of the statutory duty to file.
Filing will be done online.
Information to be filed with the Central Register on each beneficial owner should include information contained on the company’s internal beneficial ownership register.
It should also include details of the person making the submission for entry in the Central Register, i.e. name, postal address, e-mail address and telephone number.
NON – COMPLIANCE
Failure by a corporate entity to comply with its obligations regarding the beneficial ownership register or failure by the recipient of a notice to comply is a criminal offence and can result in a fine of up to €5,000 on summary conviction.
EU Fifth Anti-Money Laundering Directive (5AMLD)
The Fifth Anti-Money Laundering Directive (5AMLD) was adopted by the Council of the EU on 14 May 2018 and came into force on 9 July 2018 with an 18 month transposition period. The Department of Finance has advised that it is considering the implications of 5AMLD for the central register of beneficial ownership of companies and industrial & provident societies and will provide an update in the near future.
If you would like guidance in creating your entity’s beneficial ownership register, requesting the relevant information from shareholders or any further information in understanding your obligations, please contact Philip Collie firstname.lastname@example.org
This information is provided by Cronin & Company for guidance only and is not a legal interpretation of the SI or the EU Directive.