Beneficial Ownership Regulations:
What do you need to know? On 15th November 2016, the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2016 (the “Regulations”) were published by the Department of Finance. Lorna Osborne provides an overview of the regulations which require companies and other legal entities incorporated in Ireland to take all reasonable steps to obtain and hold adequate, accurate and current information in respect of their beneficial owners in an internal beneficial ownership register of the entity
Background
Who is a ‘Beneficial Owner’?
The regulations are the first step in the transposition of the European Union’s fourth Anti-Money Laundering Directive (the “Directive”) which required each member state to establish a central register of beneficial ownership by 26th June 2017. The regulations give effect to part of Article 30(1) of the Directive which requires corporate and other legal entities to hold adequate, accurate and current information on their beneficial ownership in an internal beneficial ownership register.
Article 3(6) of the Directive defines a “beneficial owner” in the case of corporate entities, as any natural person who ultimately owns or controls the Relevant Entity through direct or indirect ownership of a sufficient percentage of the shares or voting rights in that entity.
Who do the Regulations Apply to? The regulations apply to all corporate entities (including companies and any other body corporates) and other legal entities incorporated in Ireland (“Relevant Entities”) but excludes entities that are: • listed on a regulated market and are subject to disclosure requirements that are consistent with EU law; or • already subject to equivalent international standards ensuring adequate transparency of beneficial ownership. The regulations do not apply to trust structures governed by Irish law. A separate provision of the Directive deals with beneficial ownership of trusts but this provision has not yet been transposed into Irish law.
• Direct Ownership Test If a natural person holds 25% plus one share, or another form of ownership interest exceeding 25% (e.g. controlling voting rights in a Relevant Entity that does not have a shareholding structure), in a Relevant Entity, he will be deemed to have direct ownership and be a beneficial owner. • Indirect Ownership Test If a company or group of companies controlled by a natural person hold more than 25% of the shares, or another form of ownership interest exceeding 25%, in a Relevant Entity, the natural person will be deemed to have indirect ownership and be a beneficial owner.
What are the Key Obligations for Relevant Entities? Every Relevant Entity must take all reasonable steps to obtain and hold adequate, accurate and current
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