Luxembourg: Luxembourg Transparency Registers: Soon A Reality!

Last Updated: 12 December 2017
Article by Gérard Maîtrejean, Delphine Tempé, Shaohui Zhang and Carine Lecoq

On 6 December 2017, two Bills of Law which will implement articles 30 and 31 of the Directive (EU) 2015/849 of the European Parliament and the Council of 20 May 2015 on the prevention of the use of the financial system for the purpose of money laundering or terrorist financing ("4th Anti Money Laundering Directive") were introduced to Luxembourg's Chamber of Deputies.

The Bills of Law will put in place in Luxembourg two registers to hold and provide information on beneficial owners of Luxembourg legal entities and express trusts.

The definition of "beneficial owner" is the same as the definition set out in the law dated 12 November 2004 on the fight against money laundering and terrorist financing as amended ("AML Law"). However, the definition might be amended when Bill of Law n° 7128 enters into force ( see our alert on this topic).

1. Register of beneficial owners (Bill of Law n°7217)

Luxembourg legal entities will be required to comply with the following obligations and could face a criminal fine of up to €1,250,000 if they fail to do so:

  • To obtain and hold at their registered office information on their beneficial ownership (companies are obliged to keep such records for a period of 5 years after the dissolution or end of the existence of the entity);
  • To provide information about their legal owners and beneficial owners in the limits described below to national authorities (upon request), self-regulatory bodies which monitor compliance with anti-money laundering and counter terrorism obligations (upon reasoned request) and obliged entities when they are taking customer due diligence measures (upon reasoned request);
  • To request the filing in the register of the information on their beneficial owners.

The purpose of the table below is to highlight the main features of the register of beneficial owners, REBECO. The practical formalities relating to REBECO's operations and access will be set out by a grand-ducal regulation.

Who is the administrator of the register?  Economic interest grouping RCSL (but separate database from the Trade and Companies register)  
Which legal entities are concerned?
  • Commercial companies (private limited liability company, public company limited by shares, corporate partnership limited by shares, simplified joint stock company, simplified private limited liability company, general corporate partnership/unlimited company, common limited partnership, cooperative society, European company) except temporary commercial companies and commercial companies by participation
  • Economic interest groupings
  • European economic interest groupings
  • Civil law partnerships
  • Non-profit organisations
  • Foundations
  • Pension savings associations
  • Agricultural associations
  • State and municipality public institutions
  • Mutual insurance associations
  • Special limited partnerships
  • Other entities whose registration is foreseen by law
Exception: Companies listed on a regulated market in Luxembourg, in a state which is a contracting party to the the European Economic Area Agreement, or in another third country which imposes equivalent international standards.

Which information has to be provided and stored in the register?  Information regarding beneficial owners:
  • Name
  • First name(s)
  • Nationality(ies)
  • Day, month and year of birth
  • Place of birth
  • Country of residence
  • Accurate private/professional addres
  • National/foreign identification number
  • Nature and extent of the beneficial interests held
A grand-ducal regulation will fix the list of supporting documents to be attached to the request of registration.

The information and the supporting documents are stored in the register during 5 years after the dissolution or end of existence of the entity.

A fine of between €1,250 and €1,250,000 will be imposed to entities or their proxies which have consciously registered non-adequate, non-accurate and non-current information.

Who has to request the register to proceed to the registration? How?
  •  The above entities or their proxies
  •   The notary, writer of the incorporation deed or any amending deed of the concerned entity, can also request the registration 
The registration request is made electronically through the register's website. The administrator has three working days to process the registration once the registration request is filed.
How soon the registration of the information or their modifications have to be asked?
  • Temporary provision: Entities must request the registration of the information within six months from the entry into force of the law.
  • Principle: Entities must submit their request for registration at the latest within a month from the event which renders it necessary. Failure to do so can result in a criminal fine of €1.250 to €1,250,000.
Is the administrator allowed to refuse the registration request? Yes, if the request is incomplete or non-compliant with legal/regulatory provisions or does not correspond to the supporting documents.

In such a case, the administrator will send the applicant a request for regularization and the applicant has 15 days to comply with it. In case of default, the administrator will notify the applicant of its refusal of registration and the reasons behind its refusal. The applicant then has the possibility to appeal the decision before the competent jurisdiction.  Who can have access to the information stored in the register?

Who can have access to the information stored in the register?  
  • National authorities have access without restriction. Such authorities include Prosecution authorities, Financial Intelligence Unit, Commission de surveillance du secteur financier (CSSF), Commissariat aux assurances (CAA), Administration de l'enregistrement et des domaines (AED), Administration des douanes et accises, Tax authorities, etc.
  • Self-regulatory bodies can access the register in the framework of monitoring the obliged entities' compliance with anti-money laundering and counter terrorism obligations. Such bodies include the Conseil de l'Ordre, Chambre des notaires, Institut des réviseurs d'entreprises, Ordre des experts-comptables and Chambre des huissiers. These bodies do not have access to the private/professional address and national/foreign identification number.
  • Obliged entities as defined in the AML Law (except branches in Luxembourg of foreign obliged entities, as well as foreign obliged entities which supply services in Luxembourg without establishing any branch in Luxembourg) can access the register to perform their customer due diligence measures. They do not have access to the private/professional address and national/foreign identification number.
An unjustified request for access by a self-regulatory body or an obliged entity can lead to a criminal fine of €1,250 to €1,250,000.

  • Resident people or organizations that can demonstrate a legitimate interest based on a reasoned request addressed to the administrator can gain access to the register. The administrator transfers the request to a coordination commission, which decides on the legitimacy of the access request and informs the applicant, the concerned entity (allowing it to contest the request) and the administrator. They do not have access to the day and place of birth, private/professional address, and national/foreign identification number.
Electronic access can be requested after a period of 6 months following the entry into force of the law. No access will be granted to the supporting documents.

Is it possible to limit the access to the register? On a case-by-case basis, in exceptional circumstances and based on a reasoned request addressed to the administrator, an entity is allowed to ask that the access to the information is limited to national authorities. This is permitted in cases, where such access would expose the beneficial owner to the risk of fraud, kidnapping, blackmail, violence or intimidation, or where the beneficial owner is a minor or otherwise incapable.

The administrator transfers the request the coordination commission, which decides on the legitimacy of the request and informs the entity and the administrator about its decision.

Until the notification of the decision, the administrator limits temporarily the access to national authorities only.

2. Register of trusts (Bill of Law n°7216)

The Bill of Law n° 7116 relates to the fiduciary contracts governed by the law on trusts and fiduciary contracts dated 27 July 2003.

Luxembourg trustees are required to comply with the following obligations:

  • To obtain and hold, at their registered office, information on the beneficial ownership of trusts for which they are acting as trustee.

Information includes the identity of the following persons:

  • The settlor
  • The trustee(s)
  • The protector (if any)
  • Beneficiaries (if the beneficiaries are designated by characteristics or by categories, the trustee must obtain sufficient information to be able to establish the identity of the beneficiaries at the time of the payout or at the time the beneficiaries exercise their vested rights)
  • Any other person exercising effective control over the trust

If the above persons are natural persons, the trustee must collect the same information as for the beneficial owners of the entities, with the exception of the nature and extent of the interests held.

If the above persons are legal persons, the trustee must obtain the legal name of the legal person (including the abbreviation and commercial sign if any), the accurate address of the registered seat of the legal person, the registration number or the name of the register and the foreign registration number (if any) if the legal person is not registered with the Luxembourg Trade and Companies Register.

  • To provide, upon request, information to the national authorities (the identity of the above persons and the registration number of the trust)
  • To disclose their status as trustees and provide information to obliged entities, where they enter into a business relationship with them as trustees or carry out a transaction which exceeds certain thresholds defined in the AML Law.

    The control authorities (CSSF, CAA, AED) control the trustees' compliance with the above obligations as well as with the professional obligations as defined in the AML Law. They have supervisory and investigative powers and are entitled to impose administrative sanctions and measures.

  • To request the registration of the above information at the register for any trust which generates tax consequences. 

Trustees have a time limit of 6 months after the law enters into force to comply with the above obligations. The access to the trusts register is limited to national authorities. Bill of Law n° 7116 also provides extended supervisory and sanctions powers to the AED.

3. Additional comments

The implementation of these two new registers will create additional obligations and responsibilities for entities and trustees in Luxembourg. Therefore, they should start getting ready now even though both Bills of Law still have to follow the legislative process and might still be modified before coming into effect.

All stakeholders impacted by these two registers will also have to comply with the applicable data protection laws.

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
22 Jan 2019, Other, Luxembourg, Luxembourg

The second event in the Dentons «Women LEAD» (Leadership, Entrepreneurism, Advancement, Development) series in Luxembourg will take place on January 22, 2019.

22 Jan 2019, Briefing, London, UK

The UK government has pledged to deepen economic and trade ties with growing African economies ahead of Brexit, with a desire to overtake the US to become the G7's biggest investor in Africa by 2022.

25 Jan 2019, Other, Amsterdam, Netherlands

Dentons’ Debates ask one basic question: What role can law firms, lawyers, and the private sector in general, play in promoting social change?

Similar Articles
Relevancy Powered by MondaqAI
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions