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New EU Anti-Money Laundering Law to Make Business Ownership More Transparent

27 April 2017 By Michael O'Mahony

bigstock-Golden-Pot-Full-Of-Gold-Coins-2414803.jpgA new EU Anti-Money Laundering law is expected to make company ownership more transparent.

Anti-Money Laundering (AML) is the process where regulated and designated entities; such as Accountants, Lawyers & Bankers; are required to have systems in place to identify their clients, understand their business activities and to monitor this on an ongoing basis.

The purpose of having an AML system is to detect and prevent criminal or terrorist activity that tries to channel illegal funds through legitimate business structures.

The changes require businesses and legal entities to maintain a register of their Beneficial Owners (BO).

The Beneficial Owners of the business are the individuals who have control over the business, and therefore knowing who they are is a crucial part of AML policy.

It is worth noting that the Beneficial Owners are not necessarily the legal entity or individual named as the holder of the shares in a business as often the shares can be held by a nominee or trustee or indeed another company (in a group structure).

The Ultimate Beneficial Owners (UBOs) are generally described as the individuals who owns greater than 25% of the shares in the company.  If another company holds the shares, then the relevant individuals who hold shares in this second company are the UBOs and so on.

This recent change is seen as a further extension of years of changes in AML law with the objective of widening and further pursuit and detection of criminal and terrorist activity.

The details that are required to be maintained are as follows:

  1. the name, date of birth, nationality and residential addresses of each beneficial owner of it (the beneficial owner must be a natural person);
  2. a statement of the nature and extent of the interest held by each such beneficial owner;
  3. the date on which each natural person was entered into the register as a beneficial owner of it;
  4. the date on which each natural person who has ceased to be a beneficial owner of it ceased to be such an owner;
  5. if, having exhausted all possible means and provided there are no grounds for suspicion by the company, no natural persons are identified, or there is any doubt that the persons identified are the beneficial owners, there shall be entered in the register the names of the natural person(s) who hold the position of senior managing official(s) of the company (including their date of birth, nationality and residential addresses). In this case, a company shall keep records of the actions taken in order to identify the beneficial ownership of it.

What does this mean to you? You will need to have the above information available to provide to the agent that handles your filings with the Companies Registration Office (CRO). 

In the UK, the Companies House is already requiring that "Persons with Significant Control" are filed and soon the Companies Registration Office CRO will be requiring the same.

Due to the nature of our work setting up limited companies in Ireland we strictly adhere to Irish and EU anti-money laundering laws and regularly gather information on the beneficial owners of the companies we deal with, so we have a good understanding of what's required, and now we are preparing registers and getting ready for any filings that may be required by the CRO.

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