30 September 2019, ultimate deadline to identify your ultimate beneficial owners in the UBO Register!

With the law of 18 September 2017 all Belgian legal persons are obliged to identify their ultimate beneficial owners (“UBO’s”), collect and keep adequate, accurate and current information on them and register such information in the “UBO Register”. The precise legal obligations depend on the legal form of the legal person (companies v. (international) non-profit organizations, foundations and trusts). This blogpost outlines the essential elements of the law for start-ups.

Background – legal framework.

The EU Anti-Money Laundering Directive 2015/849 has been transposed into Belgian law by the law of 18 September 2017 on the prevention of money laundering and terrorist financing and on the restriction of the use of cash. The novelty of this law is the introduction of a UBO Register in Belgium, held by the General Administration of the Treasury of the Federal Public Service Finance. The modalities of the use and the functioning of the UBO Register are outlined in the Royal decree of 30 July 2018 (entered into force on 31 October 2018).

Obligations.

Every company incorporated in Belgium has to (i) collect and keep adequate, accurate and up-to-date information on their UBO’s and (ii) register such information in the UBO Register (accessible here). The FAQ of the General Administration of the Treasury foresee an exception on the registration of its UBO’s for companies listed on a regulated market which are subject to disclosure requirements compatible with EU law or equivalent international standards, and which guarantee adequate transparency of proprietary information (‘beursgenoteerde vennootschappen’ / ‘sociétés côtées’), and companies fully owned (100%) by such listed company.

UBO identification.

The following categories of natural persons are considered as UBO’s 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.

When calculating the percentage held by a natural person under category 1 the percentages obtained through direct and indirect participation should be summed up;

  1. natural person controlling the company via other means (e.g. control through a shareholders’ agreement, when having the power to appoint members of the management board, having veto rights, etc.);
  2. natural person who holds the position of senior managing official, if, after having exhausted all other means of identification, and provided there are no grounds for suspicion, none of the aforementioned persons is identified or if it is not sure that the person(s) identified is/are the UBO’s.

This category being a residual category, the identification of a UBO must be duly documented and justified (e.g. measures and actions undertaken to identify the two first categories, results of said measures and actions).

The following information might hold an indication as to the UBO’s of the company: shareholders’ register, presence list to the minutes of shareholders’ meetings, exercised voting rights during a general assembly, organizational chart, shareholders’ agreement, commercial register, publications in the Official State Gazette, published financial statements, minutes of board meetings, etc. This information should be gathered and stored by the company in case of any control by the General Administration of the Treasury, which at that time may request any information or document in any form whatsoever in order to verify the accuracy of the information in the UBO Register. It must not however be submitted to the UBO Register when registering the UBO’s.

In the process of identification of their UBO’s, companies must also identify every intermediary legal entity. They must map the structure to which they belong and gather the information supporting this.

Information to be provided.

Companies must submit the following information regarding each of their UBO’s to the UBO Register:

  • name and surname;
  • day, month and year of birth;
  • nationality/nationalities;
  • country of residence;
  • full address;
  • date on which he/she became ultimate beneficial owner;
  • National Register number or identification number at the Crossroads Bank for Social Security and, where appropriate, any comparable means of identification issued by the State where he/she is staying or of which he/she is a national;
  • the category/categories of ultimate beneficial owner to which he/she belongs;
  • whether he/she fulfils the conditions for qualification as ultimate beneficial owner individually or together with other persons;
  • whether he/she is a direct or an indirect ultimate beneficial owner;
  • in the case of an indirect ultimate beneficial owner: the number of intermediaries, with full identification data; and
  • the extent of the ultimate interest.

This information can of course change, with the evolution of the company: there might be new shareholders, other UBO’s may lose their stakes in the company,…. The submitted information must be updated within one month of any modification of the information and updated or confirmed annually (for which the date of first registration is the starting date).

The companies must furthermore inform their UBO’s on a “durable medium” (registered mail, e-mail, etc.), about:

  • their obligation to communicate the said information to the UBO Register;
  • the registration and storage of the information in the UBO Register;
  • the name and address of the service within the Administration of the Treasury responsible for managing the UBO Register. This is the Supervision of Financial Instruments and Institutions service (‘CFII / ‘CIFI);
  • the possibilities for access to the UBO Register. The UBO Register may be accessed by the competent authorities, the companies but only to fulfill their obligations and members of the general public;
  • the right of the UBO to consult the data recorded in his/her name in the UBO Register and to have them corrected or deleted if the data are incorrect; and
  • the period for which the data will be stored in the UBO Register.

The General Administration of the Treasury of the Federal Public Service Finance will notify the UBO of his/her registration in the UBO Register and will provide him/her with the submitted information through MyMinFin and the eBox. However those are not yet operational and the notification will occur through email at first.

Registration.

This registration in the UBO Register must be executed on the MyMinFin portal by the legal representative of the company, i.e. the directors of the company. Alternatively, a company can comply with its obligations through a proxy, by giving a mandate to a person working within the company or a third party, natural or legal person, such as a lawyer.

Entry into force.

The obligations related to the UBO Register entered into force as from 31 October 2018 but the ultimate deadline for submission to the UBO Register is 30 September 2019.

Sanctions.

Under the law of 18 September 2017, non-compliance can be sanctioned by an administrative fine varying between 250 EUR and 50.000 EUR imposed on the company, to one or more members of its statutory governing body, of its management committee, and to persons involved in their senior management in the absence of a management committee. Furthermore, under the Belgian Company Code, directors may be held liable by the company but also be punished by fines ranging from 50 EUR to 5.000 EUR.

Steps to undertake.

Which steps should you undertake to make sure your company complies with these obligations?

  • Identify the UBO’s of the company and the category (natural person (i) holding, directly and indirectly) more than 25% voting right or interest in the capital, (ii) controlling the company or (iii) if none qualify, the senior management of the company) to which they belong;
  • Gather information on the UBO’s of the company and every legal entity through which the UBO’s control the company;
  • Submit the information to the UBO Register.
    • Designate the person responsible for completing this task (i.e. determine whether the legal representative of the company or an internal or external proxy will do it);
  • 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 up procedures and policies so that every change in the submitted information or relating to the UBO’s is submitted to the UBO Register within one month and the information in the UBO Register is confirmed once a year.

Incidentally, in order to comply with the obligations under the General Data Protection Regulation (GDPR), the records of processing activities should be updated to reflect these additional data flows (to the extent that the UBO’s are natural persons).

Click here for more general information and for the FAQ in French here and the FAQ in Dutch here. For more information on how to connect and proceed with the online application click here for Dutch and here for French.

Need help?

We are happy to assist you in meeting your UBO and other anti-money laundering obligations. Feel free to contact Laetitia DE SMET (lads@daldewolf.com) or Magali de FOOZ (mdf@daldewolf.com).

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