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Disclosing your beneficial owners – Is your company compliant?

  • Ireland
  • Corporate secretarial services

11-10-2021

It has been more than two years since The European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019 (the “2019 Regulations”) came into force, requiring all relevant entities incorporated in Ireland to (i) maintain information on their beneficial owners on an internal beneficial ownership register (“RBO”) and (ii) provide this information to the Central Register of Beneficial Ownership (the “CRBO”).

Existing relevant entities were required to disclose their beneficial ownership information to the CRBO by 22 November 2019. Newly incorporated companies have five months from the date of their incorporation to make their disclosures and if a change occurs in any information pertaining to a beneficial owner or the beneficial ownership of a relevant entity, this must be disclosed to the CRBO within 14 days of the change taking place.

The 2019 Regulations and CRBO were introduced as part of the transposition of the Fourth Anti-Money Laundering Directive (“4AMLD”), the purpose of which was to improve corporate trust and transparency in Ireland and the European Union. Notwithstanding this, there are still companies and relevant entities in Ireland that have failed to comply with the 2019 Regulations and, according to the 2020 annual report for the CRBO, only 81% of companies are in compliance. This equates to approximately 44,000 companies in Ireland that are in default of their obligations.

What is a Beneficial Owner?

A “beneficial owner” is defined in Article 3(6) of 4AMLD as a natural person who ultimately owns or controls a legal entity, either through direct or indirect ownership of at least 25% of the voting rights, shares or ownership interest in the entity or through control via other means. Control via other means can arise when an individual does not necessarily retain ownership of more than 25% of an entity but still exercises significant control or influence over the entity, for example:

  • Control via a shareholders’ agreement;
  • Control via exercising dominant influence; and/or
  • Control by having power to appoint the Board or senior management of the entity.

In cases where a beneficial owner does not exist or cannot be identified, the details of the "senior managing officials" of the entity must be recorded instead both on the internal RBO and on the CRBO.

Penalties

Consequences of non-compliance could be severe. A relevant entity that fails to comply with the 2019 Regulations commits an offence and could be liable to conviction on indictment, which carries a fine up to €500,000. Custodial sentences can be imposed for up to 12 months on any person who knowingly or recklessly makes a materially false statement to the CRBO.

We can help!

The CRBO is commencing action against companies for non-compliance and those that are in default are advised to act now to avoid prosecution. Our highly skilled company secretarial team can provide assistance and advice on everything your company needs to be compliant and remain compliant with the 2019 Regulations.

Please get in touch with a member of our company secretarial team and we would be delighted to assist

Liam Boyle, Head of Company Secretarial - LiamBoyle@eversheds-sutherland.ie

Aidan Rafferty, Company Secretary - AidanRafferty@eversheds-sutherland.ie