As a result of the implementation of the 4th (and, in part, 5th) EU Anti-Money Laundering Directive(s) into Belgian law, companies incorporated in Belgium and other legal entities are required to identify and collect information on their beneficial owners (UBOs) and record these information in the Belgian online beneficial owners register (the UBO Register).
The UBO Register, which will soon be operational, is operated by a department of the General Treasury Administration of the FPS Finance (the Treasury Administration). The Treasury Administration maintains a UBO Register website, which contains relevant information and is updated from time to time: https://finance.belgium.be/en/register-beneficial-owners.
Recording information in the UBO Register will have to be made by 30 November 2018 (see below (4)) via the online platform MyMinFin. Log-in will require the use of a BE ID-card and pin code.
You will find below a summary of the relevant requirements on how Belgian companies must complete the UBO Register. Note that the same obligation applies to (international) non-profit associations and foundations, trusts and fiducies and similar legal entities. They are however not discussed in this alert.
Note that the UBO Register-related obligations can be found in the following pieces of legislation:
- Articles 73-75, 4, 27° and 132 para. 6 of the Act of 18 September 2017 on the prevention of money laundering and terrorist financing and on the restriction of the use of cash (the AML Act);
- The Royal Decree of 30 July 2018 on the operating procedures of the UBO Register, published in the Belgian Gazette of 14 August 2018 and entering into force on 31 October 2018 (the Royal Decree); and
- Articles 14/1 and 14/2 of the Companies Code and articles 58/11 and 58/12 of Act of 27 June 1921 on non-profit-making associations, non-profit-making international associations and foundations (see also articles 1:29 to 1:32 of the draft new Companies and Associations Code which modifies the existing classification of legal entities).
(1) Who must identify their UBOs?
Any company incorporated in Belgium is required to identify its UBOs and file that information in the UBO Register.
(2) Who should be recorded as UBOs of a Belgian company?
The following three categories of individuals qualify as UBOs of a company. Note that every company must always identify the two first categories of UBOs (which are cumulative) whereas the third one is only a residual category:
- The individual(s) who ultimately
own(s) or control(s) the company through direct or indirect
ownership of a sufficient percentage of the shares or voting rights
in the company, including through bearer shares.
- An individual holding more than 25% of the shares or voting rights in the company shall be an indication of direct ownership;
- A shareholding held by a company that is under the control of (an) individual(s) or by multiple companies that are under the control of the same individual(s), of more than 25% of the shares or voting rights in the company, shall be an indication of indirect ownership;
- The individual(s) exercising control
over the company via other means.
Eg: the individuals effectively controlling the company or holding the power to appoint members of the administrative, management or supervisory bodies of the company, a shareholders' agreement, veto rights...;
- The individual(s) holding the
position of senior managing official(s).
Eg: the CEO, the Chairman of the management committee...
Note that this is a residual category that only applies if, after having exhausted all other means of identification, and provided there are no grounds for suspicion, no individuals indicated in the two above categories could be identified or if it is not certain that the individuals identified are UBOs. Being a residual category, the identification of senior managing officials as UBOs must be duly documented and justified (eg, measures and actions undertaken to identify the two first categories, results of said measures and actions taken).
(3) What UBO information must the company collect and record in the UBO Register?
The following information must be provided on each UBO to the UBO Register:
- The last name and first name;
- The date of birth (day/month/year);
- The citizenship(s);
- The country of residence;
- The complete address of residence;
- The date at which they became an UBO of the Company;
- The national registry number, crossroads bank for social security number, or similar identifier issued by the State in which they reside or of which they are a citizen;
- The relevant category of UBO they belong to (see the three categories listed above (2));
- Whether they are a direct or an
- If they are an indirect UBO: the number of intermediaries and for each of them their complete identification, including at least the name, the date of incorporation, the legal name, the legal form, the address of the registered office, the crossroads bank for enterprises number and, where applicable, any other similar identifier issued by the State in which the intermediary is registered;
- Whether they are an isolated UBO or jointly with other individuals;
- The extent of the interest held (eg, the weighted percentage of shares or voting rights held in the company).
Note that companies must provide a number of information to their UBOs for the purpose of data protection, including but not limited to the fact that the UBO information is being recorded in the Register and that UBOs have the right to access their information and request the Treasury Administration to modify or delete any inaccurate information.
In addition, the Treasury Administration will inform each UBO that they are recorded in the Register and of the information recorded in the UBO Register in their name.
(4) Who must complete the UBO Register on behalf of the company and when?
The directors of the company are responsible for filing the relevant information in the UBO Register on behalf of the company.
They must do so within 1 month from the moment the information regarding the UBO is known or has changed.
Therefore, since the Royal Decree enters into force on 31 October 2018, directors have until 30 November 2018 to record for the first time the UBO information in the UBO Register.
(5) What are the sanctions attached to the failure to comply with the above obligations?
The following breaches carry out administrative (A) / criminal (C) sanctions:
- Failing to collect and hold UBO information (A/C);
- Failing to provide the information to the UBO Register (A/C);
- Providing incomplete/incorrect information to the UBO Register (A).
(A) The Minister of Finance can impose an administrative fine of EUR 250 to EUR 50,000 on directors of the company and, where appropriate, on members of their statutory body, their management committee, and persons involved in their senior management in the absence of a management committee, who are responsible for any of the above breaches.
(C) The directors of the company are subject to a criminal fine of EUR 400 to EUR 40,000 in the event of a relevant breach.
According to our information, the authorities should take a lenient approach at first regarding sanctions since this is a new obligation that applies to companies and their directors.
(6) Who can access the UBO Register?
The UBO Register of companies can be accessed by:
- Competent authorities (including tax authorities);
- Obliged entities that must comply with the AML Act; and
- Any member of the public (elke
burger/tout membre du grand public).
- Members of the public may only conduct (paying) searches on the basis of the company's CBE number or name. In addition, they may only access limited UBO information, ie the last name, month/year of birth, citizenship(s), country of residence, and nature and extent of interest held by the UBO.
Note that UBOs may ask the Treasury Administration to limit access to their information to competent authorities and obliged entities that are credit/financial institutions or notaries in exceptional circumstances, ie where the UBO:
- Would face disproportionate risk, fraud, harassment, kidnapping, blackmailing, extortion, violence or threats from unrestricted access being granted to such information; or
- Is minor of age or incapacitated.
Also note that companies and their UBOs will not be informed of searches made on them in the UBO Register.
(7) What about data retention?
The UBO information recorded in the UBO Register will be kept for a period of 10 years after the date the relevant company lost its legal personality or definitively ceased its activities.
In addition, the Treasury Administration will keep any search conducted on the UBO Register for a period of 10 years.
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.