Since 15 November 2016, companies, ICAVs and most other legal entities incorporated in Ireland 1 ("relevant entities") have been obliged to obtain and maintain up-to-date information on their beneficial owners in the expectation that it would be necessary to submit such information to a central beneficial ownership register.
As anticipated, on 22 March 2019, the Department of Finance signed into law regulations 2 (the "New Regulations") providing for the establishment of a Central Register of Beneficial Ownership of Companies and Industrial and Provident Societies (the "Central Register") by the Registrar of Beneficial Ownership of Companies and Industrial and Provident Societies (the "Registrar") 3. The New Regulations replace and restate the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2016 ("the 2016 Regulations").
The Registrar will not be accepting beneficial ownership information for ICAVs. It is understood that a separate central register will be established in due course to deal with beneficial ownership information for these entities. This role will most likely be performed by the Central Bank of Ireland.
In a previous update Who are Your Beneficial Owners? we considered the 2016 Regulations and, in particular, (i) the definition of relevant entities and beneficial owners; and (ii) the obligations of relevant entities and beneficial owners in relation to the compilation and maintenance of beneficial ownership registers ("BOR"). With the exception of the added obligation to obtain PPS numbers of beneficial owners (where such number has been assigned), the matters discussed in that update remain unchanged in the New Regulations.
In this update we discuss the Central Register requirements - the information to be filed, deadlines and accessibility, as well as other obligations imposed by the New Regulations.
Initial Information to be Delivered to the Central Register
Existing relevant entities are required to submit the following information by 22 November 2019, 4 and relevant entities incorporated after 22 June 2019 will have five months from the date of incorporation to deliver the same information, to the Central Register:
- 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 the nature and extent of control exercised by, each such beneficial owner; and
- The PPS number 5 of each beneficial owner to whom a PPS number has been assigned (or such other information as is required by the Registrar). While PPS numbers must be submitted to the Central Register, relevant entities and the Registrar may not otherwise disclose this information and only "hashed versions" (which do not allow the PPS numbers to be determined) shall be stored on the Central Register.
If, having exhausted all possible means, 6 no natural persons are identified as being the beneficial owners or, if there is any doubt that such natural person is a beneficial owner, the relevant entity must file the names of one or more natural persons who hold the position of senior managing official 7 of the relevant entity together with their date of birth, nationality, residential address and PPS number.
Persons Entitled to Access Information on the Central Register
The information contained on the Central Register can be accessed by:
- Members of the public;
- Designated Persons; 8
- Bodies such as An Garda Síochána, Financial Intelligence Units, the Revenue Commissioners and the Criminal Assets Bureau; and
- Competent authorities who are engaged in the prevention, detection or investigation of possible money laundering or terrorist financing.
Information that may be accessed
- The information accessible by members of the public and Designated Persons is limited to the name, the month and year of birth, the country of residence and nationality of each beneficial owner together with a statement of the nature and extent of the interest held, or the nature and extent of control exercised, by each such beneficial owner.
- Where a member of the public or a Designated Person seeks to have access to any information that relates to a minor who is a beneficial owner, they must provide a summary of the grounds on which it considers it is in the public interest that the information be disclosed to it. The Registrar can refuse this application if it is of the opinion that there are not substantial grounds for such an access request.
- An Garda Síochána, Financial Intelligence Units, Revenue Commissioners, Criminal Assets Bureau and other competent authorities listed above (the "Competent Authorities") will be entitled to access all information contained on the Central Register with the exception of beneficial owners' PPS numbers.
The Registrar is not obliged to notify relevant entities that third parties have accessed their beneficial ownership details contained on the Central Register.
New Obligation Requiring Relevant Entities to Provide Information to Designated Persons
When a relevant entity enters into an occasional transaction, 9 or forms a business relationship, with a Designated Person, the relevant entity must:
- Provide the Designated Person with information as to its beneficial ownership (in addition to information about its legal ownership) when the Designated Person is taking customer due diligence measures in accordance with Part 4 of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010;
- On request from the Designated Person, provide the Designated Person with information identifying all the beneficial owners of the relevant entity; and
- Notify the Designated Person of any change to its BOR that is relevant to the occasional transaction or that occurs during the course of the business relationship formed within 14 days from the date on which the relevant entity becomes aware of the change.
Obligations to Report Discrepancies to the Registrar
If Designated Persons, or any Competent Authorities, determine that there is a discrepancy between the information provided to them and the information filed on the Central Register, they must report the discrepancy to the Registrar in a timely manner. The Registrar will then serve a notice on the relevant entity asking them to clarify the discrepancies raised.
Duty to Keep and Maintain a BOR
The New Regulations oblige relevant entities to ensure that their BORs are maintained and up-to-date.
This means that if a relevant entity has:
- Been notified of a change to the information contained on its BOR by a beneficial owner (or with its knowledge), it must update its BOR; or
- Reasonable cause to believe that there has been a change to the information contained on its BOR, it must send a notice to the relevant beneficial owner seeking such information to allow it to make the necessary updates to its BOR.
Duty to Keep BOR and Central Register Aligned and up-to-date
Any changes that occur in the information contained in a relevant entity's BOR must be reflected by a corresponding change to the Central Register.
Failure to Comply with Filing Obligations on the Central Register
A relevant entity that fails to comply with its obligations under the New Regulations commits an offence and is liable (a) on summary conviction to a class A fine (not exceeding €5,000), or (b) on conviction on indictment, to a fine not exceeding €500,000.
What actions should relevant entities take?
Relevant entities who have not yet taken steps to obtain and hold information about their beneficial owners should do so now (noting the new requirement to obtain PPS numbers of beneficial owners).
Relevant entities should note it is expected that the Central Register will be accessible in advance of filing obligations becoming effective (at the end of April, subject to change) and it may be that the process for filing and information required by the Registrar will develop over time.
1 The exception is companies listed on a regulated market and subject to disclosure requirements consistent with EU law or subject to equivalent international standards that ensure adequate transparency of ownership information.
2 The exception is companies listed on a regulated market and subject to disclosure requirements consistent with EU law or subject to equivalent international standards that ensure adequate transparency of ownership information.
3 The European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019.
4 The obligation to submit information to the Central Register does not commence until 22 June 2019.
5 A PPS number is a personal public service number issued by the Irish Department of Employment Affairs and Social Protection. It is a unique identifier for use in certain transactions with public bodies.
6 See requirements contained in our previous update Who are Your Beneficial Owners?
7 Senior managing officials include directors and chief executive officers of relevant entities.
8 The definition of "Designated Person" includes credit and financial institutions, auditors, relevant independent legal professionals, trust or company service providers, property service providers, persons who provide gambling activities and persons trading in goods that involve cash transactions of at least €10,000.
9 Occasional transaction means a transaction in relation to which the Designated Person is required to apply customer due diligence within the meaning of Part 4 of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010.
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.