On 15 November 2016, the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2016 (the "Regulations") were published by the Department of Finance. These Regulations derive from the EU’s Fourth Anti-Money Laundering Directive (AMLD4). One of the principal aims of AMLD4 is to ensure that individuals with significant economic interests in a relevant entity can be identified for the purposes of customer due diligence to combat terrorist financing and money laundering.
The Regulations require companies and other legal entities incorporated in Ireland to take all reasonable steps to gather and maintain adequate, accurate and current information on their "beneficial owners" on a beneficial ownership register as and from 15 November 2016.
Under the Regulations, a “beneficial owner” is a natural person who directly or indirectly owns or controls over 25% of the share capital or the voting rights or control by any other means.
The register of beneficial ownership must contain the following information in respect of each beneficial owner:
It should also be noted that a change in director may also trigger an update to the beneficial ownership register, where no beneficial owners have been identified and the directors have been entered in the register as the “beneficial owners”.
An entity must prepare and dispatch a Regulation 6 Notice to any individual whom it has reasonable cause to believe is a beneficial owner. This individual should confirm whether he or she is a beneficial owner of the entity within one month of receiving the Notice. If the individual is a beneficial owner, he or she must confirm that the details in the Notice are correct.
A Regulation 8 Notice may also be given by an entity to any person who is believed to be aware of the identity of other individuals who may be beneficial owners.
Individuals who are beneficial owners are obliged to notify entities in which they have a beneficial interest of that interest if the required information has not already been provided.
A Regulation 6 Notice is not required if an entity knows an individual is a beneficial owner, and the necessary information relating to the individual has been provided either by the individual or with his or her knowledge.
How should an entity maintain the beneficial ownership register?
Where there is reasonable cause to believe that there has been a change in beneficial ownership or a change in the details of a beneficial owner on the beneficial ownership register, a Regulation 10 Notice should be prepared and dispatched to the individual concerned. This individual should confirm if the change is correct within one month of receiving the Notice.
Failure by a relevant entity or the recipient of a notice to comply with any of the above obligations is a criminal offence and can result in the imposition of a fine of €5,000 on summary conviction.
It is expected that a central public register will be set up by the Companies Registration Office in March/April 2019. It is also expected that Irish based beneficial owners will be required to provide their PPSN, in addition to the details set out above, on the beneficial ownership register. It is likely that non-national beneficial owners, living outside of Ireland who do not have a PPSN will be required to enter their passport number.
Once established, there will not be an immediate obligation to file a company’s beneficial ownership data. It is expected that this obligation to file will commence six months after the launch of the public register. It is envisaged that the public will not have access to the register until late 2019/early 2020 and that only limited information will be available.
The Regulations apply to all Irish companies and other corporate bodies which include ICAVs and Industrial and Provident Societies.
Companies which are listed on a regulated market that are subject to disclosure requirements consistent with the law of the EU and companies that are subject to equivalent international standards that require disclosure of beneficial ownership information are exempt from the Regulations.
This obligation is in force and all entities to which the Regulations apply must establish or take exhaustive steps to establish and record the required information in respect of their beneficial owners or their directors / senior managers.
Director, PwC Ireland (Republic of)
Tel: +353 1 792 6070
Senior Manager, PwC Ireland (Republic of)
Tel: +353 1 792 6881