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The Department of Finance published the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2016 (the "Regulations") on 15 November 2016 with the obligations of the Regulations taking immediate effect from that date. These new Regulations will impact the vast majority of Irish companies, who are now obliged to establish and maintain a register of their beneficial owners. This is a significant change from the long established principle that a company did not need to concern itself with trust arrangements that sit behind shareholdings.
Background
The Fourth Anti-Money Laundering Directive is due to be transposed into each Member State’s law by 26 June 2017, however the new Regulations transpose the first sub-paragraph of Article 30(1) of the Directive now, in order to ensure that all affected companies have sufficient time to gather the relevant information in advance of the creation of the central register of beneficial ownership which is required to be established by each Member State under the Directive.
The purpose of these requirements is to enable identification of the natural persons who are the real (i.e. beneficial) owners/controllers of companies in order to assist relevant authorities to combat money laundering and terrorist financing. In its current guise, the Directive provides that the information on the central register will be accessible by competent authorities, financial intelligence units, financial services entities when carrying out their customer due diligence measures and any persons who can demonstrate a "legitimate interest" in the information. However, amendments to the Directive have been proposed which would require the information on the register to be accessible by members of the public.
Key Points to Note
The Regulations apply to all Irish companies other than those that are listed on a regulated market that is subject to disclosure requirements consistent with the law of the EU, or those subject to equivalent international standards which ensure adequate transparency of ownership information.
“Beneficial Owner” means any natural person being the ultimate owner or controller of the relevant entity and/or on whose behalf the entity is carrying out its activities. With regard to corporate entities it relates to a natural person who directly or indirectly (e.g. through other corporate entities) holds a shareholding or ownership interest of 25% plus one share or more than a 25% ownership interest.
Affected entities must take all reasonable steps to gather and maintain a register containing the name, date of birth, nationality, residential address and nature of the interest held by each of its beneficial owners. The register must also note the dates upon which the person became a beneficial owner and ceased to be such.
Full details of the requirements of the Regulations can be accessed here and should you wish to discuss this matter further please contact a member of the Corporate and Commercial Department at McDowell Purcell.