European Union Anti Money Laundering – Beneficial Ownership of Corporate Entities Regulations 2016
The Fourth EU Anti Money Laundering Directive has been transposed into Irish law courtesy of the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2016.
This statutory instrument compels companies, corporate and other legal entities incorporated within Ireland to keep adequate, accurate and current information on their beneficial ownership, including details of the beneficial interests held. It commenced on the 15th November 2016.
The intent of the regulation is to enable details of the natural persons who are the real owners/controllers of a company to be identifiable on a public register. In many cases, the legal owners and beneficial owners are one and the same. The regulation seeks to compensate for the many complex company ownership structures in place by determining who the underlying beneficial owners are. It seeks to create mechanisms to assist entitles such as such as banks to conduct due diligence on companies and other bodies by requiring companies to identify the natural persons controlling them, even if doing so necessitates in-depth legal analysis of their ownership structures.
The only exempted types of entities are those that are:
- Listed on a regulated market that is subject to disclosure requirements consistent with the law of the EU, or
- Subject to equivalent international standards which ensure adequate transparency of ownership information
The description of ‘beneficial owner’ for the purposes of the regulation is provided by Article 3(6) (a) of the 4AMLD. It compels companies to reveal the identity of the natural person or persons ultimately controlling them through direct or indirect ownership by holding a specific 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 company 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.
Following the regulations every corporate or other legal entity must now take all reasonable steps to obtain and keep adequate, accurate and current information in respect of its beneficial owners, (e.g. name, d.o.b., address, statement of nature and extent of interest held by each beneficial owner) and to maintain a register of that information with its corporate records.
The target date for the implementation of the register within the Companies Registration Office in Ireland is the 1st May 2017 and companies holding beneficial ownership arrangements must be prepared to deliver the necessary information to the Registrar from this date.
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