New procedure for the registered entities to access their own data
On 22 November 2022, the Court of Justice of the European Union (CJEU
) published a decision affecting European member states national beneficial ownership registers.
This judgment by the Court, sitting as the Grand Chamber in Luxembourg, has held that, in the light of the Charter, the provision of the anti-money-laundering directive whereby Member States must ensure that the information on the beneficial ownership of corporate and other legal entities incorporated within their territory is accessible in all cases to any member of the general public is invalid.
Anti Money Laundering Directives
In accordance with anti-money laundering directives across Europe, member states were obliged to create an online register to detail the beneficial owners of companies registered in each member state. In Ireland, this was created by the CRO establishing the Central Register of Beneficial owners of companies and Industrial and provident societies (CBRO). www.rbo.gov.ie
This online register enabled anyone to have public access to specific details on the beneficial owner of an entity by paying a small access fee online.
However, this accessibility was recently challenged by a Luxembourg-registered company and its beneficial owner, with a judgement, decided at the end of November 2022.
In summary, therefore, the ECJ believes that while maintaining registers of Ultimate Beneficial Owners is vital in the fight against money laundering and terrorism financing, it is not proportionate that the general public should have completely unfettered access to entity ownership information.
Accordingly, the Irish register has now been closed to the general public, and only ‘designated persons‘ can access who must apply by filing an online request form BEN3A1.
The term ‘designated person’ is outlined in Section 25 of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, as amended, and includes financial institutions, accountants, auditors, tax advisers, legal professionals, property service providers, virtual currency service providers and dealers in expensive goods such as houses, cars, jewellery, artworks, etc.
Also, under Section 33 of the 2010 Act, ‘designated persons’ are obliged to conduct customer due diligence tests on customers “prior to the establishment of a business relationship with a customer”, “prior to carrying out an occasional transaction with, for or on behalf of a customer” or “carrying out any service for the customer….…”
While public access is suspended, this does not take the obligation to register away from beneficial owners. Companies are still obliged to create and maintain their internal registers of beneficial owners and to communicate any changes to the CRBO. For new companies, this must be completed within five months of incorporation.
If a relevant entity does not file with the RBO, it may be guilty of an offence and be liable on summary conviction to a Class A fine of up to €5,000 and on conviction on indictment to a fine of up to €500,000.
Just because public access has been restricted, this has not changed the requirements for companies to maintain their registers and communicate any changes to the CRBO.
Designated persons will need to register to still access this information as part of their onboarding / know-your-client requirement as required by law.
We have previously assisted many companies in completing their registration requirements to establish their new Irish company. Contact us to discuss the impacts of any of these changes to your company structures or your filing requirements here in Ireland.
Please contact a team member to discuss further.
February 22, 2023