Based on Article 30 of Directive (EU) 2015/849 of the European Parliament, the RBE Law dated January 13, 2019 regulates the obligations of covered entities to obtain and hold information on their "ultimate beneficial owner" (UBO) and make this accessible to the public and Luxembourg authorities. All covered entities are required to make their UBO disclosures to the RBE Law by September 1, 2019.
Luxembourg Covered Entities
All entities registered with the Trade and Companies Register (RCS) including, but not limited to, General Partners, UCITS, SIFs, FCPs, SCSPs, SLP, SOPARFIs, etc.
Covered entities must take all reasonable steps to obtain, hold and disclose to the RBE adequate, accurate and current information on their UBO(s):
- Any natural person who owns or controls a legal entity through direct or indirect ownership of enough shares or voting rights or ownership interest in that entity.
- Direct ownership: Shareholding 25% plus one share/ownership interest of more than 25% held by a natural person shall be an indication of direct ownership (this is an indicator, not a threshold).
- Indirect ownership: Shareholding 25% plus one share/ownership interest of more than 25% 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 (this is an indicator, not a threshold).
Where no individual UBO can be identified (though sometimes, any natural person is identified as holding), a senior leader role at the covered entity can be listed as the UBO in the RBE.
Failure to comply with the RBE law may result in criminal fines amounting to €1,250,000.
Duff & Phelps and Kroll's UBO Solutions
UBO Documentation Reviews
Ahead of submission to the RBE, Kroll, a division of Duff & Phelps, reviews UBO information – either for a single entity or for large batches of covered entities – to assess whether the proposed disclosures are adequate. This triage allows our clients to identify covered entities where UBO information may be incomplete and to submit complete files to the RBE confidently.
Where UBO information is incomplete, Kroll conducts public record research to identify UBOs, Person(s) of Significant Control (PSC) or, if appropriate, a senior leader to be named at the UBO to the RBE.
Our standard UBO reports include research on pre-agreed number of ownership layers to identify all relevant parties. This research can be expanded to fulfil wider compliance requirements such as:
- Searches to confirm or identify the source of capital of a covered entity or associated UBOs and large entities;
- Searches for political exposure and state ownership;
- Enforcement checks; and
- Searches for anti-money laundering, corruption and illegal business practice assessments.
RBE Data Submission and Administration
Once all relevant UBO information has been properly verified and documented, Kroll assists organizations in making submissions to the RBE on their behalf, where it's required. Additionally, Kroll reviews and refreshes the UBO data submitted to the RBE on a monthly basis, ensuring compliance with RBE Law requirements to keep this data up to date.
Why Kroll and Duff & Phelps?
For over 14 years, owing to both local exposure and its integration into a worldwide group, Duff & Phelps has successfully supported international asset managers for their entities in Luxembourg. Duff & Phelps is a Super Manco servicing all strategies (securities, private equity, real estate, hedge fund, credit and loans).
Kroll provides different due diligence and investigative services and has been helping clients identify and mitigate reputational and transactional risks. These include risks stemming from global regulatory and legal requirements for over 45 years.
Our RBE-related services also provide a comprehensive suite of due diligence and compliance solutions. Clients can:
- Manage their entire program with Kroll's Compliance Portal, designed to address specific workflow needs such as screening and monitoring, governance, due diligence and compliance.
- Take a risk-based approach to their program through Kroll's screening and due diligence reports that provide escalating levels of research, from first-view screening to on-the-ground investigations.
- Enhance the design, set-up and implementation of their compliance program by partnering with our expert consultants.
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.