New rules regarding maintenance and disclosure of beneficial ownership of Irish corporate entitiesWednesday, 03 April 2019
Many Irish corporate entities have been required to maintain a beneficial ownership register (BOR) containing information on the beneficial ownership of those entities since 15 November 2016 under the EU (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2016 (the 2016 Regulations). On 22 March 2019, new EU (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019 (the 2019 Regulations) came into force.
The obligations in the 2019 Regulations apply, as under the 2016 Regulations, to all corporate or other legal entities incorporated in Ireland, including all types of Irish incorporated companies, industrial and provident societies (IPSes) and ICAVs (except those constituted as trusts) (in-scope entities).
The 2019 Regulations revoke and, in the main, restate the 2016 Regulations as well as introducing additional requirements for in-scope entities to file their beneficial ownership information on the Central Register of Beneficial Ownership (CRBO) to which there will be varying degrees of third party/public access as well as increased sanctions for non-compliance. These measures form part of the European and domestic anti-money laundering regulatory regime, as required by the Fourth and Fifth Anti-Money Laundering Directives (4AMLD and 5AMLD respectively).
We have outlined below some key points on the obligations of in-scope entities and their ultimate beneficial owners and officers under the 2019 Regulations, including the critical dates.
- Immediate: Part 2, which revokes and restates (with certain amendments) the 2016 Regulations governing the obligation on in-scope entities to maintain a BOR and related obligations on beneficial owners and officers of in-scope entities came into force immediately on 22 March 2019 and applies to all in-scope entities, their beneficial owners and officers.
- 22 June 2019: There is a grace period of 3 months before the CRBO goes live on 22 June 2019. It is expected that the Registrar of Companies (the CRO) will be appointed as Registrar of Beneficial Ownership of Companies and IPSes (the Registrar) under Part 3 of the 2019 Regulations, with responsibility for maintaining the CRBO.
- 22 November 2019 onwards: Existing in-scope entities must submit their beneficial ownership information to the Registrar for filing on the CRBO within 5 months of the CRBO go-live date and new in-scope entities must file within 5 months of incorporation.
- 10 March 2021: The deadline for all CRBOs across EU Member States to be interconnected.
Key New BOR obligations under Part 2 of the 2019 Regulations
- The PPS number of each beneficial owner, who has been issued a PPS number, must be collected by the in-scope entity to be provided to the Registrar. It is but not stored on the BOR or disclosed other than to the Registrar to the extent noted below.
- Access to the BOR must be granted by an in-scope entity to the Garda Síochána, the Revenue Commissioners, the Criminal Assets Bureau (CAB), an inspector of the Office of Director of Corporate Enforcement (ODCE), or a competent authority in a regulated sector.
- In-scope entities involved in transactions requiring customer due diligence or dealings with designated persons have new disclosure obligations.
Key New CRBO obligations under Part 3 of the 2019 Regulations
- The information to be provided to the Registrar by an in-scope entity includes the name, date of birth, nationality and residential address of each beneficial owner, a statement of the nature and extent of the interest held or control exercised by each beneficial owner, the PPS number of relevant beneficial owners (for verification purposes only), and the name and registered number of the in-scope entity.
- PPS numbers provided to the Registrar are for verification purposes only. Only an encrypted version of the PPS number, and not the PPS number itself, may be retained by the Registrar. The PPS number cannot be disclosed by the Registrar and will not appear on the CRBO.
- In-scope entities must deliver to the Registrar notification of any changes to its BOR with 14 days of the changes occurring to enable the CRBO to be updated.
- A general obligation exists for those with access to the CRBO (other than the public) to notify the Registrar of any discrepancies in the information filed of which they become aware.
- Restricted access to certain (but not all) information will be given to the public who may access the name, month and year of birth, country of residence and nationality of each beneficial owner, and a statement of the nature and extent of the interest held by the beneficial owner or the nature or extent of control exercised by the beneficial owner. Where the beneficial owner is aged under 18, access to their information in the CRBO will only be granted where public interest prevails.
- Unrestricted access to the CRBO will be granted to specified members/personnel of the Garda Síochána, the Revenue Commissioners, CAB, ODCE or a competent authority engaged in AML prevention, detection or investigation while restricted access to certain information (as above for the public) on the CRBO will be granted to ‘designated persons’ with whom the in-scope entity enters into an ‘occasional transaction’ (i.e. one requiring the designated person to apply customer due diligence measures) or forms a business relationship. The Registrar may impose an administrative fee for such restricted access.
Pan-EU information sharing/disclosure
The 2019 Regulations implement 5AMLD by providing for inter-connection of the Irish CRBO with the central registers of other EU member states prior to 10 March 2021. The 2019 Regulations also permit public bodies which are granted access to the BORs of in-scope entities under the 2019 Regulations (as noted above) to disclose the information obtained to a corresponding competent authority in another EU Member State.
New and increased sanctions for non-compliance
- Penalties have been increased and more serious offences now carry fines of up to €500,000 and/or up to 12 months’ imprisonment. Where an in-scope entity is convicted of an offence related to the CRBO, individual officers of the in-scope entity can held liable in addition to the in-scope entity being held liable.
- Prosecution of summary offences under the 2019 Regulations can be brought by either the Registrar by the DPP or the Registrar. The DPP may bring indictable prosecutions.
The above information is intended as a guide for reference purposes only and does not purport to be legal advice. Readers are advised to seek independent professional advice before acting on anything contained in these materials.