As we have previously informed you through our newsletter, based on the fourth Anti-Money Laundering Directive (“AMLD4”) all EU Member States have to establish a register containing accurate information on the UBO’s of enterprises and legal entities (“UBO-Register”). The aim of the registration of information on the UBO’s is to protect the integrity of the financial system. By providing more transparency on ownership and control the legislator aims to protect the integrity of the financial system against money laundering, terrorist financing, corruption, tax crimes etc. Although, the deadline for implementation has passed on 26 June 2017, AMLD4 has not yet been implemented in the Netherlands.
On 5 July 2016 the European Commission has proposed a Directive which amends AMLD4, also regarding the provisions of the UBO-Register. This Directive is referred to as the fifth Anti-Money Laundering Directive (“AMLD5”). AMLD5 provides among other that part of the information on the UBO’s must be publicly available and not only to persons who are able to demonstrate a legitimate interest. Under AMLD5, the threshold with regard to UBO’s of legal entities which qualify as a Passive Non-Financial Entity is reduced to 10%. AMLD5 effects the draft laws implementing AMLD4 in the Netherlands. Reason of which, as the Dutch government has informed the parliament by its letter of 20 April 2018, the implementation of AMLD4 cannot be continued unchanged. AMLD5 further extends the term for implementing the provisions of AMLD4 concerning the UBO-Register until eighteen months after AMLD5 has come into force. The Dutch government indicated that it expects that AMLD5 will be in force at the end of spring 2018. The Dutch government has indicated that it will submit an amended law implementing AMLD4 (together with AMLD5) after AMLD5 has come into force.
On 6 April 2018 the Dutch government has published a draft regulation which clarifies some aspects of the implementation of AMLD4 in the Netherlands. In the context of the UBO-Register a UBO refers to any natural person who owns more than 25% of the shares or has more than 25% of the voting rights in a legal entity. A commonly used construction in the Netherlands for separating legal and economic ownership is the making use of a foundation (Stichting Administratiekantoor or StAK). Such foundation holds the shares in the capital of a company and is the legal owner of the shares. In turn, the foundation distributes depositary receipts to the economic beneficiaries of the shares. It has now been made clear that not all holders of depositary receipts but only holders of depositary receipts representing more than 25% of the shareholding in the company must be registered in the UBO-Register. However, it is not clear yet whether AMLD5 will affect the draft regulation.
Some European countries have already established a UBO-Register. For example in Cyprus, a UBO-Register has been implemented by law of 3 April 2018. However, the operations and procedures of the Cypriot UBO-Register will be further worked-out in yet to be published regulations. Accessibility to the Cypriot UBO-Register is divided into three categories: (1) several Cypriot authorities, among which the Central Bank, the Securities and Exchange Commission the Institute of Certified Public Accountants and the Bar Association, have unlimited access, (2) organizations like banking institutions, lawyers, auditors and accountants have access to the information in the UBO-Register during their due diligence procedures and (3) other persons who prove that they have a legitimate interest, which will be further set out in the yet to be published regulations, who require the information for anti-money laundering activities and insofar it complies with privacy laws, will have access to limited information in the UBO-Register (name, month and year of birth, nationality and country of residence, the band the ownership/controlling rights fall in). Here too, AMLD5 might have an effect on the accessibility of the UBO-Register.
AMLD4 has been implemented in Belgium by law of 18 September 2017, with effect as of 16 October 2017. Accessibility to the Belgium UBO-Register will further be worked out in regulations, which have not yet been published.