In November 2022 the Court of Justice of the European Union (CJEU) ruled that the rights of the public to access information on the beneficial ownership of companies was “a serious interference with the fundamental rights to respect private life, and to the protection of personal data”.

Whilst the provision of beneficial ownership originated from an EU Directive on Anti-Money Laundering the right of public access to that information impacts in so many different areas.

This is an EU wide problem as the bulk of Member States in the EU have established their own Registries of Beneficial Ownership.

Buying, selling, merging companies all include basic searches in the Companies Registration Office and Central Register of Beneficial Ownership. These searches are intended to support the information provided by the buyer, selling, merging entities and give comfort to all involved.

Would you be willing to consider buying or selling or merging with a company when you cannot verify details of beneficial ownership filed in the relevant EU Registry?

Despite immediate and widespread reaction against the ruling the reality means that for many companies throughout Europe their rights to access beneficial ownership details continue to be denied.

One of the biggest talking points at the time the Beneficial Ownership Register was put in place was the fact that the public could access it. This meant the public could see the names of the beneficial owners, what percentage shareholding they might hold and even their dates of birth and home addresses!

All that has now changed further to an unexpected European Court Judgment last week. Its ruling means that from now on only ‘Designated Persons’ can search the Register and obtain beneficial ownership details.

From a practical point of view, the ruling will not affect the vast majority of companies. They are still obliged to ensure both their internal and external Beneficial Ownership Registers are completed in full and kept up to date. The banks as a ‘Designated Person’ will continue to be able to search the Register and (in our experience) refuse to/delay providing credit facilities to companies if they have queries over the information lodged.

In summary, even if Joe Public can no longer have a peep, there is still no excuse not to register your Beneficial Ownership information and keep it updated!

We recently incorporated a new company that found itself unable to open a new banking facility until it had provided proof that it had filed on the Registry of Beneficial Ownership. This was despite the fact that it had another 5 months to file beneficial ownership details (all newly incorporated companies have 5 months from incorporation to file). Increasingly, financial institutions are making beneficial ownership part of their due diligence process so companies shouldn’t neglect to file or neglect to keep their beneficial ownership details up to date. You have been warned!

The deadline for filing Benficial Ownership details in the Central Beneficial Ownership Register is the 22nd of November, 2019. KomSec would advise clients not to leave registration until the last minute as a rush of registrations could cause a system overload in the Companies Registration Office (which is handling filings on behalf of the Registrar of Beneficial Owernship). It should also be remembered that the 2019 legislation increased the sanctions substantially from those provided for in the 2016 legislation. A company who breaches the Regulations may now be liable to a class A fine (currently up to €5,000) or, on indictment, a fine not exceeding €500,000. In addition to these fines, custodial sentences of up to 12 months can be imposed. You have been warned!

Further details can be obtained by contacting KomSec or accessing the Central Register website at https://rbo.gov.ie/

Just to add to the joy of working from home and all its attendant pleasures companies are now starting to receive notices of non-compliance for failing to file beneficial ownership details with the Central Register of Beneficial Ownership!

The timing may be tough but failing to file beneficial ownership details will be much tougher.

All companies incorporated in Ireland must file beneficial ownership details with the Central Registry. Failure to comply is an offence leaving both the company and its directors liable to:

(a)       on summary conviction                       Class A fine (up to €5,000); or

(b)       on conviction on indictment                 Fine not exceeding €500,000.

If you do nothing else this week at least check if your company has filed, and if not, get the ball rolling asap.

Central Register of Beneficial Ownership of Companies and Provident Societies – Opening Postponed

The common understanding of Beneficial Ownership is that companies must provide details of any individual with an ultimate shareholding of 25%+1 share in any company registered in Ireland. 

Providing a detailed understanding of the intricacies involved or, obtaining the pertinent information required is not easy.

The history in implementing EU Anti-Money Laundering Directives in Ireland is almost as long as the name of the Irish Central Register.   Some of the key points relating to Anti-Money Laundering and Beneficial Ownership are noted below.

November 2016            Statutory Instrument No. 560 requiring companies to create and maintain a Register of Beneficial Ownership

July 2018                      5^th Anti-Money Laundering Directive entered into force in EU

November 2018            Criminal Justice (Money Laundering and Terrorist Financing) (Amending) Act 2018

March 2019                  Statutory Instrument No. 110 requiring companies to file their Beneficial Ownership details with the Central Register

June 2019                    Central Register to be open for electronic filings by companies

November 2019            Deadline for all companies to complete their filings on the Central Register

January 2020               Transposition of 5^th Anti-Money Laundering Directive by all Member States

It should have been possible from 22.06.2019 for companies to start electronically filing in the Central Register.  Unfortunately, the Central Register have advised that the opening of the Register has been postponed temporarily.

Regardless of whether or not one can file on the Central Register companies must still maintain and update their own internal Register of Beneficial Owners.