Under regulations which came into force in 2016 (the “Prior Regulations”) most corporate and other legal entities incorporated in Ireland are required to gather information on individuals who are their underlying beneficial owners and establish and maintain a local beneficial ownership register containing such information. The new European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019 (the “2019 Regulations”), which came into force on 22 March 2019, operates to repeal, restate and expand the scope of the Prior Regulations.
The obligation on such corporate and other legal entities to gather information and to establish and maintain a beneficial ownership register remains (a “Beneficial Ownership Register”). However, the 2019 Regulations also require that, with effect from 22 June 2019, such entities must also file their beneficial ownership details on a central beneficial ownership register (the “Central Register”).
Who is in scope?
The Irish corporates and other legal entities which were in scope under the Prior Regulations are the entities falling within the scope of the 2019 Regulations and are called "relevant entities". Irish companies continue to be excluded from the scope of the 2019 Regulations if they are listed on a regulated market that is subject to disclosure requirements consistent with the law of the EU or are already subject to equivalent international standards which ensure transparency of ownership information. Irish incorporated subsidiaries of listed companies are not exempt.
The definition of “beneficial owner” remains unchanged. Furthermore, the obligation on a relevant entity to list its “senior managing officials” on its Beneficial Ownership Register where it cannot identify any beneficial owners remains. A link to our previous briefing on beneficial ownership of Irish companies is available here.
Part 3 of the 2019 Regulations which concerns the Central Register will not become operative until 22 June 2019. It is expected that the Registrar of Companies will be appointed as the relevant registrar with responsibility for maintaining the Central Register (the “Registrar”).
The following information is required to be delivered by a relevant entity to the Registrar:
- the name, date of birth, nationality and residential address of each of its beneficial owners;
- a statement of the nature and extent of the interest held or control exercised by each of its beneficial owners;
- the registered name and number of the relevant entity as they appear on the public register kept under the Companies Act 2014 or the Industrial and Provident Societies Acts 1893 to 2014
- in the case of each beneficial owner with a PPS number, that beneficial owner’s PPS number; and
- such other information as determined by the Registrar.
The requirement to include the registered name and number of a relevant entity as they appear on the public register kept under the Companies Act 2014 or Industrial and Provident Societies Acts 1893 to 2014 raises questions as to how relevant entities which are not registered under such statutes, such as Irish Collective Asset-management Vehicles (“ICAVs”) registered with the Central Bank of Ireland, can comply with the stated information disclosure requirements as set out in the 2019 Regulations, and whether the Registrar of Companies, if designated as Registrar, will even accept disclosure from such other entities. We understand that this apparent gap in the drafting of the 2019 Regulations has been brought to the attention of the appropriate authorities and, hopefully, some clarification will be forthcoming shortly.
A relevant entity must keep its Beneficial Ownership Register up-to-date and the information aligned with that filed in the Central Register. When updating its Beneficial Ownership Register, the relevant entity must also notify the Registrar of any relevant changes within 14 days in order that the Central Register may be updated.
In terms of access to information filed in the Central Register, the public may access the Central Register but access will be restricted to certain of the content only and it should be noted that PPS numbers and residential addresses will not be made available to the public. Certain authorities such as an Garda Siochana, the Revenue, the Criminal Assets Bureau or a competent authority engaged in the prevention of money laundering will have open access to the Central Register. These authorities may exchange this information with other EU competent authorities.
What are the relevant timelines in respect of a live Central Register and first filings?
Once the Central Register comes into operation on 22 June 2019, existing relevant entities will have five months from that date to deliver the relevant information to the Registrar for inclusion in the Central Register. Accordingly 22 November 2019 is the relevant first filing deadline for companies incorporated before 22 June 2019. A relevant entity incorporated on or after 22 June 2019 will have five months from its date of incorporation to first deliver the relevant information to the Registrar for inclusion in the Central Register.
Reporting to and by designated persons
Where a relevant entity enters into an occasional transaction (and customer due diligence is required) or a business relationship with a “designated person”, it must provide, on request, information identifying its beneficial owners. Designated persons are those categories of persons listed in Section 25 of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 and include certain credit and financial institutions, auditors, external accountants, tax advisers, independent legal professionals, casinos and persons trading in goods for cash payment of at least €15,000. If the designated person such as the relevant entity’s solicitor or accountant forms an opinion that there is a discrepancy between the information on the relevant entity’s Beneficial Ownership Register and that on the Central Register he or she must notify the Registrar accordingly and the 2019 Regulations set out a prescribed process in respect of notices and clarification. Furthermore, it would appear that due to the wide wording of Regulation 20(3) of the 2019 Regulations this obligation on a designated person to notify the Registrar is not just confined to information obtained for instance in the course of customer due diligence but extends to other circumstances where the designated person becomes aware of a discrepancy between the two registers. Given that one of the offences under the 2019 Regulations, in addition to failure by a relevant entity to provide correct or rectified information to the Registrar, includes failure by a designated person to notify the Registrar of a discrepancy, this provision is one in particular for advisors and other designated persons to be fully aware of.
We will keep you informed of any updates or developments in the context of the 2019 Regulations as we become aware of them.
If you would like to discuss the impact that these new measures will have on your organisation, please get in touch with your usual Matheson contact.
Other Matheson articles in relation to this area can be found on the Matheson website. These include the article “Beneficial Ownership of Irish Trusts – What Has Happened?”
This article was co-authored by Corporate M&A partner, Fergus Bolster and Professional Support Lawyer, Ursula McMahon.