In November 2016, Michael Noonan, Minister for Finance, signed into Irish law the European Union (Anti-Money Laundering: Beneficial Ownership Of Corporate Entities) Regulations 2016 (“2016 Beneficial Ownership Regulations”). These regulations required corporate and other legal entities incorporated in Ireland to collect and store, via an internal register, certain Beneficial Ownership information – the Beneficial Ownership Register (BOR).
In March 2019, the European Union (Anti-Money Laundering: Beneficial Ownership Of Corporate Entities) Regulations 2019 (“2019 Beneficial Ownership Regulations”) came into effect in Ireland revoking the 2016 Beneficial Ownership Regulations. In addition to the ongoing obligation to maintain the BOR, a key development includes the new requirement to file, by 22 November 2019, Beneficial Ownership details to an external register (i.e. rbo.gov.ie) – the Register of Beneficial Ownership (RBO).
The objective of the 2019 Beneficial Ownership Regulations is to help designated persons, such as banks, to conduct customer due diligence to identify natural persons controlling companies and other relevant entities, even where this may require an in-depth legal analysis of their ownership structure. This is part of wider efforts by the EU to combat money laundering and terrorism financing.
Set out below are 5 key considerations relevant to achieving compliance with the 2019 Beneficial Ownership Regulations.
The 2019 Beneficial Ownership Regulations note that the relevant entities in scope are corporate or other legal entities incorporated in Ireland and include “a company and any other body corporate so incorporated”. These include, for example, industrial and provident societies and companies limited by guarantee.
Entities not in scope, according to the 2019 Beneficial Ownership Regulations, are companies or other body corporates –
“(a) listed on a regulated market that is subject to disclosure requirements consistent with the law of the European Union, or (b) subject to equivalent international standards which ensure adequate transparency of ownership information.” (Source: irishstatutebook.ie)
Identifying Beneficial Owners is not always straightforward and can be more challenging for relevant entities with complex structures or where dominant influence is exercised.
A Beneficial Owner is described as a natural person who ultimately owns or controls 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% held by a natural person is considered an indication of direct ownership.
If no natural person can be identified as per the above criteria, the natural person(s) who hold(s) the position of senior managing official(s), which includes Chief Executive Officer(s), is/are recorded on the BOR as the Beneficial Owner.
As mentioned, the 2016 Beneficial Ownership Regulations required relevant entities to obtain Beneficial Ownership details and maintain this data on an internal register, i.e. BOR. To help ensure Beneficial Ownership compliance, relevant entities should review their BOR data and ensure that it is up to date before submitting the data to the RBO.
Relevant entities should put in place processes and procedures to ensure that their BOR is kept up to date. Furthermore, updates to a relevant entity’s BOR must be submitted to the RBO within 14 days.
It is important to note that the 2019 Beneficial Ownership Regulations require additional Beneficial Ownership data to be collated. While most of the data required is similar to that required under the 2016 Beneficial Ownership Regulations, capturing the additional data can potentially be time consuming (see the full list of required Beneficial Ownership data, here), particularly where Beneficial Owners do not have an Irish PPSN.
PPSNs are used for identity verification purposes. If a Beneficial Owner does not have an Irish PPSN, a BEN 2 Form is the method that will be used to verify that person’s identity. BEN 2 Forms must be notarised before submitting them to the RBO. Relevant entities, particularly those with non-resident Beneficial Owners, should therefore take into account the added time that is required to notarise documents when preparing Beneficial Ownership data submissions for the 22 November 2019 deadline.
The RBO is open for relevant entities to register their Beneficial Ownership details. The Companies Registration Office (CRO) is the statutory body responsible for the establishment and maintenance of the RBO.
Set out below are key considerations that relevant entities should take into account when submitting Beneficial Ownership details to the RBO:
Companies and other legal entities may find it challenging to assess whether they are relevant entities, to identify their Beneficial Owners and to ultimately achieve Beneficial Ownership compliance while continuing business as usual. In this regard, if we can assist you or your firm, request a Callback from our Company Secretarial team, here.
Our dedicated team of Company Secretarial Professionals possess the tools and the expertise to assist you in meeting your Company Secretarial compliance obligations, including Beneficial Ownership compliance, accurately and efficiently. Learn more about our Company Secretarial Services here.
Request a Company Secretarial Services Callback, here.
The content above is provided for general information purposes only and is not intended to provide, nor does it constitute, professional advice on any particular matter. If you would like more information or would like to discuss any of the topics raised above, please contact one of the above Key Contacts.
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