Beneficial Owners: Four Months to go

1. Where does this new obligation comes from?

The EU’s Fourth Anti Money Laundering Directive (AMLD 4) sets out requirements regarding beneficial ownership information which must be obtained by corporate and other legal entities and held in national central registers (Article 30.1 and 30.3 of the mentioned Directive).

The EU Directive has been implemented in Luxembourg by the Law of 13 January 2019 (to be read in conjunction with the Grand-Ducal Regulation of 15 February 2019).

This new obligation answers the growing need for accurate and up-to-date information about beneficial owners. Key factor in tracing criminals, the ambition is to prevent anyone from hiding their identity behind corporate structures.

As such, all entities listed on the Luxembourg Trade and Companies Register (the RCS) will be affected. Each of them must declare their UBOs at the RBE, with the exception of sole traders who are natural persons (commerçants personnes physiques) (the Registered Entity(ies))

2. As a registered entity, who qualifies as my beneficial owner?

Any natural person who ultimately owns or controls the Registered Entity through direct or indirect ownership of a certain minimum percentage of the shares or voting rights or ownership interest in that entity. That includes control through bearer shares, or through any other means.

A shareholding of 25% plus one share or an ownership interest of more than 25% in the entity held by a natural person is an indication of direct ownership.

If no UBO is identified through the 25% criteria described above, the Registered Entities must indicate the natural person(s) holding the position of senior management (dirigeant principal). Disclosing such sensitive information may, however, be difficult in practice.

Who can file UBO information with the RBE?

the Registered Entity itself; or

• by proxy; or
• by a notary; or
• through the LBR assistance desk available to the public.

How do I file UBO information with the RBE?

Information is entered on the dedicated RBE web portal by filling out an electronic declaration form. To access the online declaration process, the user must connect to the website with a Luxtrust certificate.  

What UBO information must be filed with the RBE

If a beneficial owner has been identified

• last name and first name;
• nationality(ies);
• date of birth (day, month and year);
• place of birth;
• country of residence;
• full private or professional address;
• identification number for the individuals registered in the Luxembourg Register of natural persons (or for non-resident individuals their national identification number, e.g. the number of the ID card); and
• nature and extent of the effective interests held.

If no beneficial owner was identified

If no beneficial owner was identified, the natural person who holds the position of chief executive is to be entered in the RBE. All information listed above is to be entered onto the RBE, with the exception of information concerning the nature and the extent of the current interest held.

It is for the Registered Entity to determine who exercises the control over it:

• the legal representative (représentant legal);
• the managing director (gérant);
• the Chairman of the Board of Directors;
• the CEO (administrateur délégué);
• the senior manager of the general partner in fund structures (it is critical to look at the fund’s constitutional documents such as the prospectus and its articles of incorporation to determine how the fund is managed).

Publicly-traded companies

Where the Registered Entity is a stock listed company, information is limited to the name of the regulated market on which its securities are admitted for trading.

In such cases, the Registered Entity must also produce a document certifying that it is a company whose securities are admitted to trading on a regulated market in the Grand Duchy of Luxembourg or in another State party to the agreement on the EEA or in another third country imposing obligations equivalent as the EU Commission.

Who can access UBO information?

• National authorities have access to all UBO information. They include, amongst others:
• prosecutors,
• judicial police officers,
• The Luxembourg Financial Intelligence Unit (Cellule de Renseignement Financier),
• the Luxembourg financial and insurance sectors supervisory authorities (the Commission de Surveillance du Secteur Financier and the Commissariat aux Assurances),
• the Luxembourg tax authorities (Administration des contributions directes, Administration de l’enregistrement, des Domaines et de la TVA, Administration des douanes et accises…)

Any person can have access to all UBO information, except for the private or professional address and identification number of the UBOs. As of 1 September 2019, the RBE may be consulted free of charge on the LBR’ website.

Searches in the RBE may be performed by company name or registration number of the entity registered in the RCS.

How can I limit access to UBO information?

The Registered Entities or the UBOs may request that access is limited exclusively to national authorities, credit and financial institutions, as well as bailiffs and notaries acting in their professional capacity. Such limitation requests may be objected under exceptional circumstances: where access to information available in the RBE could expose the UBO to a disproportionate risk or a risk of fraud, kidnapping, blackmail, violence, intimidation, or where the UBO is either a juvenile or legally disabled (incapable).

This access limitation can be on initial filing or anytime thereafter.

It is limited in time and can only be granted for the duration of the circumstances justifying it, for a maximum period of three years.

Once the time has elapsed, UBO information becomes available to the public unless the request for access limitation has been renewed no later than one month before the expiry date of the limitation.

What are the fees for filing/amending UBO information?

Filings will be made free of charge until 31 August 2019.

After this date, registration or amendment of UBO information will be subject to an administrative fee of €15 (with an additional fee of €100 for rush processing).

What are the fees for an extract including UBO information?

Obtaining an extract including the UBO information filed by a registered entity is subject to an administrative fee of  €10 in paper format (€5 in electronic format).

What are the fees to be paid for a certificate of non-declaration of beneficial owners?

If no information has been entered onto the RBE for an entity, it is also possible to order a certificate attesting to this fact.

Obtaining a certificate of non-declaration of beneficial owners is subject to an administrative fee of  €10 in paper format (€5 in electronic format).

This new obligation involves the processing of personal data (obtaining the UBO information, filing it with the RBE, storage in the RBE). The processing of personal data should be permitted in order to comply with the obligations laid down in the AMLD 4, including identification of the beneficial owner of a legal person or legal arrangement. This means that the compliance with a legal obligation to which the controller is subject (i.e. the AMLD 4 or the UBO Register Law) can serve as a legal ground to justify the lawfulness of the UBO information processing.

However, the Registered Entity must comply with the GDPR requirements such as

• respect of the UBO’s rights;
• “data minimisation”: personal data collected should be limited to what is strictly necessary for the purpose of complying with the legal requirements
• etc...

The Registered Entity would be subject to a criminal fine ranging from EUR 1,250 to EUR 1,250,000.