Even more transparency for transparent companies
The starting point
State and corporate compliance obligations to combat money laundering and terrorist financing remain an utmost priority for EU member states. Companies (“legal entities”) have therefore been obliged to disclose their “beneficial owners”, among other things, for quite some time. In Austria, a separate database - the “Beneficial Owners Register” - was set up for this purpose. The beneficial owner is the person who is the legal owner of a company or who (otherwise) exercises control over it.
Even more transparency
In course of the implementation of the 5th EU Money Laundering Directive, further tightening measures have now been adopted. These will come into force in stages, starting in January 2020. The aim is to establish the register as a central platform for the identification and verification of “beneficial owners”.
Inspection for anyone
Some innovations bring about a real paradigm shift: Previously, only a limited number of obligated persons were permitted to inspect the register, in addition to the authorities, under certain conditions. In the future, anyone will be able to inspect the register. A special interest is no longer a prerequisite. Such a public extract contains essential data on the company concerned and its beneficial owners. Trust structures shall be disclosed; they may be kept secret only exceptionally and under very limited conditions.
Legal entities shall, at least once a year, obtain adequate, accurate and up-to-date information about their beneficial owners and their economic interests. In addition, it must be checked whether the beneficial owners reported to the register are still up to date. Within four weeks of the due date of the annual review, observed changes shall be reported or the reported data confirmed.
The “Compliance Package” is also new. This (voluntary) instrument creates the possibility to upload into the register all information, data and documents necessary for the identification of the beneficial owner. However, certain information must mandatorily be disclosed, e.g. an organisation chart or evidence of relevant trusteeships. Articles of association or partnership agreements must also be registered if they result in differing voting rights or control relationships. All in all, the requirements for a CP are quite strict. In exceptional cases, documents may be replaced by substantiating notes. The management of the legal entity shall confirm that the CP is complete. – Purpose: With a CP, the time required to provide substantiating information on demand can be reduced. In any case, a legal entity is obliged to do so.
Author: Alexander Wöß