Putting the fourth anti-money laundering directive in practice.
With the implementation of the Fourth Anti-Money Laundering (4th AML) directive, the EU is aiming to enhance tax transparency, prevent abuse and focus on the fight against money laundering and the financing of terrorism.
The 4th AML directive ensures that the beneficial owners behind corporate and legal entities are identified. In this regard, as of 1 January 2018 all corporate entities and trusts registered in any one of the Member states are obliged to keep adequate and detailed information on the ultimate beneficial owners holding directly or indirectly more than 25% of the shares, voting rights or through control via other means. An exception to this is in place for companies listed on a regulated market which is subject to disclosure requirements through other equivalent regulations or in terms of other international standards.
The register of beneficial Ownership in practice
As of this year, every company must keep a detailed register, holding up to date information on the beneficial owners, such details must include;
- Full name
- Date of birth
- Country of residence
- Official identification document number and country of issuance
- Nature and size of the beneficial interest held by the beneficial owner
- The effective date on which a natural person became or cease to be a beneficial owner.
Such information must be submitted at the registry of companies and shall in accordance with data protection requirements be accessible as from the 1 April 2018 by the persons indicated in the Regulations being;
- relevant competent authorities;
- persons subject to obligations relating to the prevention, combating and detection of money laundering and combating of financing of terrorism; and
- other persons and organisations who submit a written request and show a legitimate interest in the information they seek to access.
In exceptional circumstances it can be justified by means of documentary evidence that the information should not be accessible, however this needs to be determined on a case by case basis and will only apply where such access would expose a beneficial owner to risk of fraud, kidnapping, blackmail, violence, intimidation; or if the beneficial owner is a minor or otherwise incapable.
Every entity formed and registered before the coming into force of these regulations has a period of six months from the date of the coming into force of these regulations to have the register in place.
Offences and Penalties
Should the company fail to comply with the new regulations, every officer, shareholder and beneficial owner shall be jointly and severally liable to penalties which can amount form EUR500 for providing misleading, false or deceptive information and can go up to EUR5,000 or to imprisonment up to 6 months, or both.
How can we help you?
Our team of dedicated professionals can help you comply with new requirements. At TAXEA we aim to assist clients by providing guidance on duties and obligations, identifying and providing management solutions making sure your processes of keeping the ultimate beneficial ownership register up to date and compliant.