Expert analysis from Joanne McEnteggart, Managing Director of IQ-EQ Ireland.
In line with the EU’s anti-money laundering (AML) directives, beneficial ownership registers have now been introduced in many EU countries, including Ireland, which launched its Central Register of Beneficial Ownership (RBO) – logging the ultimate beneficial owners of Irish corporate entities – on 29 July 2019. But what does this mean for Irish businesses, in practice? Who is affected? What needs to be done, and by when? And what will happen if compliance isn’t achieved?
Regulatory scope
The regulations apply to every corporate or other legal entity incorporated in Ireland, with just two exceptions: (i) those listed on a regulated market subject to disclosure requirements consistent with EU law, and (ii) those subject to equivalent international standards ensuring adequate transparency of ownership information.
All affected entities are required to take reasonable steps to collect and maintain accurate and current information on their beneficial owners – i.e. all individuals who ultimately own (with a >25% share) or otherwise control the company – and to keep the RBO up to date.
What details go into the RBO?
A range of key details must be maintained in the RBO for each beneficial owner. These include the individual’s full name, their date and place of birth, nationality, country of residence, private residential address and Personal Public Service Number (PPSN).
If a beneficial owner does not have an Irish PPSN, they must apply for an RBO Transaction Number by filing a Form BEN2 - Declaration as to Verification of Identity with the Registrar.
In addition, the RBO requires to know the nature and extent of interests held by the beneficial owner, the date they first entered into the RBO as a beneficial owner and, if applicable, the date upon which they cease to be a beneficial owner.
Who has access to the register?
There are two levels of RBO access available: restricted and unrestricted. Unrestricted access, which includes all details apart from the PPSN number, is granted to:
- An Garda Síochána
- Financial Intelligence Unit (FIU) Ireland
- Revenue Commissioners
- Criminal Assets Bureau
- Competent authorities engaged in the prevention, detection or investigation of possible money laundering or terrorist financing
- An inspector appointed under section 764(1) of the Companies Act 2014.
Meanwhile, restricted access – limited to the beneficial owner’s name, month and year of birth, country of residence and nationality as well as a statement of the nature and extend of interests held or control exercised – is available to the general public. This includes any designated person who forms a business relationship with a relevant entity or is taking customer due diligence measures in relation to a relevant entity.
Sanctions for non-compliance
Any relevant entity that fails to comply with the regulations shall be liable to a fine of up to €5,000 or, on conviction on indictment, a fine not exceeding €500,000. In addition, custodial sentences of up to 12 months can be imposed on any person who makes a false statement to the Registrar, and does so knowingly or recklessly.
Time is ticking
Following the launch of the RBO in July, relevant entities now have until 22 November 2019 to file their beneficial ownership details on this central register. Going forward, newly incorporated entities must file their beneficial ownership details within five months of incorporation. Companies also have a legal obligation to keep the beneficial owners’ details up to date on the RBO. Any changes must be notified to the Registrar within 14 days.
The introduction of the RBO in Ireland, as well as equivalent national registers across Europe, marks a major step forward in international AML efforts, and firms must come well prepared with a streamlined, multi-step process to ensure immediate and ongoing compliance.
Joanne McEnteggart is Managing Director of IQ-EQ Ireland.