The Department of Finance has confirmed that the beneficial ownership central register (the "Central Register") will be introduced in the fourth quarter of 2017.
The introduction of the Central Register is the second part of Ireland's implementation of the beneficial ownership regime under the Fourth Anti-Money Laundering Directive EU/2015/849 ("4AMLD"). The requirement to create and maintain an internal register of beneficial owners was introduced for the majority of corporate and other legal entities with effect from 15 November 2016. This forms part of a broader revision of the EU anti-money laundering framework under 4AMLD, including a greater emphasis on a risk-based approach to addressing money laundering.
Since the publication of 4AMLD, there has been considerable debate at EU level in relation to both data protection and personal security concerns in light of the Central Register requirement. The current proposal is for an amending Fifth Anti-Money Laundering Directive ("5AMLD") to address these concerns. 4AMLD was required to be transposed in full into national law by 26 June 2017. It is now expected that this will be completed by the fourth quarter of 2017.
Please see our previous update for further background on the transposition of 4AMLD into Irish law by the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2016 (the "Regulations").
Timing and content of Central Register
The Department of Finance has indicated that development work on the Central Register will continue under the above-mentioned revised timelines and the Companies Registration Office has also stated that:
- Further updates on the Central Register launch will be provided in early September 2017.
- Filing of beneficial ownership details will be completed online with no filing fee.
- There will be an extended timeframe (of at least three months) for companies to make their beneficial ownership filings after the launch of the Central Register.
The information required to be filed will include the following:
- names, dates of birth, nationalities and addresses of each beneficial owner;
- nature and extent of the interest held by each beneficial owner;
- date on which the natural person was entered as a beneficial owner; and
- date on which a beneficial owner ceased to be a beneficial owner.
In the absence of any beneficial owners being identified (that is, where there are no persons holding, either directly or indirectly, 25% or more of the share capital or voting rights in the relevant company), directors' details should then be submitted to the Central Register.
Who can inspect the Central Register?
4AMLD specifies certain minimum publication requirements, including providing access to:
- competent authorities – for example, the Central Bank of Ireland;
- entities required to carry out customer due diligence (for example, banks, accountants, tax advisors and solicitors); and
- others with a 'legitimate interest' in enforcing anti-money laundering legislation.
It is unclear at this stage whether Ireland's transposition will go beyond these minimum publication requirements and provide full access to the Central Register for the general public.
What other changes are included in 5AMLD?
Other notable changes in 5AMLD are:
- a lower beneficial ownership threshold of 10% for passive non-financial entities, where money laundering poses a bigger risk; and
- further requirements for the introduction of central registers across the EU. The current draft of 5AMLD provides that EU Member States must be compliant with register requirements within 18 months of the 5AMLD implementation date and registers must be interconnected through a European Central Platform within 18 months of the implementation date.
The final text of 5AMLD will depend on the outcome of negotiations between the European Council and the European Parliament and therefore may be subject to further changes.
In the meantime, it is advisable that companies and other corporate entities registered in Ireland continue to compile and maintain internal registers of beneficial ownership in preparation of a likely filing deadline in early 2018. These obligations have applied since 15 November 2016.
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.