The register of ultimate beneficial owners: yet another change
In Luxembourg, a draft law is being drawn up in order to establish a register of ultimate beneficial owners. The purpose of this register is to combat money laundering and the funding of terrorism and would in theory aid all stakeholders concerned.
Companies would be obliged to transmit the information regarding their beneficial owners. In fact, this law would merely be a transcription into Luxembourg law of EU Directive 2015/849 Article 30 (4th directive on money laundering). This obligation would apply to businesses, foundations, charities, civil society organisations, economic interest groups, limited partnerships, etc… It would not apply to branches of entities based abroad or to companies listed on a regulated market. The head offices of the entities concerned would be required to keep and update the information relating to these owners. This would involve declaring all natural persons who have direct control via shares or any other means. Direct ownership is defined as 25% or more. In the event of non-compliance, the penalties would range from €1,250 to €1,250,000. In spite of the “GDPR” law, it is not necessary to obtain the owner’s prior agreement as it is a case of a lawful and legitimate requirement. This so-called “REBECO” register would have to be correctly supplied with data, with each country having its own register of this type. This amounts to another obligation alongside so many others and doesn’t exclude the divulgence of these same beneficial owners to other parties such as banks, within the framework of their KYC checks. Clearly then, it constitutes an additional obligation rather than being information reusable by the banks. This continuous accumulation is regrettable, even if the request is legitimate and hard to argue against in the current climate. We will no doubt be discussing regulations of this type for some time to come, as it’s likely that this latest one will not be the last. So prepare yourself and be sure to achieve compliance in good time!
"This continuous accumulation is regrettable, even if the request is legitimate and hard to argue against in the current climate." François Masquelier, Chairman of ATEL