A new law has been adopted that imposes an obligation upon all legal entities to collect and keep adequate, accurate and current information on their “ultimate beneficial owners” (UBO) and to transmit such information to the “UBO Register”. This blogpost will explain the definition of an “ultimate beneficial owner”, the objectives of the new law and, consequently, the impact on companies. The law provides different rules depending on the legal form of the organisation (companies v. (international) non-profit organisations, foundations and trusts) but we will focus on companies.
Background. The EU Anti-Money Laundering Directive 2015/849 has been transposed into the Belgian law by the law of 18 September 2017 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing and limitations to the use of cash (hereinafter the “Law”) which has introduced the Ultimate Beneficiary Owner (UBO) Register in Belgium. The modalities of the use and the functioning of the UBO Register are outlined in the Royal decree of 30 July 2018 (entering into force on 31 October 2018).
Obligations. All legal entities, and in particular companies, incorporated in Belgium must abide by the obligation to (i) collect and keep adequate, accurate and up-to-date information on their ultimate beneficial owners and (ii) to transmit such information to the UBO Register by an administrator or any other mandated legal representative, through an online application of the Ministry of Finance (MyMinfin or www.finances.belgium.be -> E-services -> Register of Beneficial Owners). This means that start-ups are subject to the same obligations, whatever legal form they have chosen to perform their activities.
The objective of the UBO Register, which will be publicly accessible, is to centralise all the information in order to facilitate the access to the data. In case of modification of the data or changes in the beneficial ownership, the updated information had to be notified (for publication) within one month of the change.
The following categories of persons are considered as beneficial owners of companies :
1. natural person directly or indirectly holding a sufficient percentage of the voting rights or ownership interest in the company.
A direct shareholding or an ownership interest of more than 25 % shall be an indication of direct ownership or sufficient percentage of voting rights. In case of indirect ownership, the percentage to be taken into account is the weighted percentage;
2. natural person controlling the company by any other means (e.g. shareholders’ agreement, the power to appoint members of the management board, veto right);
3. if nobody in the entity is identified under point 1 and 2 above, natural person holding the position of senior managing official (to be understood as residual category).
At least the following information on the beneficial owners has to be collected and divulged:
– The name, date of birth and nationality;
– The address of the beneficial owner;
– The date on which he or she became beneficial owner;
– The national registration number or company number and
– The extent of the interest held in company.
The obligations related to the UBO Register will enter into force as from 31 October 2018 but the ultimate deadline for compliance has been extended to 31 March 2019.
Non-compliance with these obligations can be sanctioned by an administrative fine varying between 250 EUR and 50.000 EUR. The Treasury Board of the Ministry of Finance can request any information or document in any form whatsoever in order to verify the accuracy of the information in the UBO Register.
To do. Which steps should you undertake to make sure your company complies with the new obligations relating to the UBO Register?
– Identify the beneficial owners and to which category your beneficial owners belong (i.e. (1) natural persons directly or indirectly holding a sufficient percentage of the voting rights or ownership interest in the company or (2) natural persons owning or controlling the company by any other means and the third, or (3) natural persons holding the position of senior managing official – i.e. the residual category);
– Gather information (for instance, accurate percentage of ownership interest or voting rights) on the beneficial owners of the organisation and every legal entity through which your beneficial owners control the entity;
– Appoint a representative who has an E-ID card and can fill in all the information via the online platform MyMinFinPro for your organisation;
– Gather documents establishing that the information submitted is adequate, accurate and up to date, such as shareholders registers, modifications of the board structure, minutes of shareholders’ meetings and board meetings, to avoid the lack of evidence in case of control;
– Set procedures in place so that every change of information on the beneficial owners is transmitted to the UBO Register within one month and the information in the UBO Register is confirmed annually. You could e.g. appoint someone in charge to keep an eye on every change that could influence the shareholding or the control by any means of the company or keep an internal register.
You can always contact us at email@example.com or firstname.lastname@example.org.
– EU Directive 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC
– Law of 18 September 2017 on the prevention of money laundering and terrorist financing and the limitation of the use of cash.
– Royal decree of 30 July 2018 regarding the operating modalities of the UBO register