Nowhere to hide: the register of ultimate beneficial owners
In view of enhancing transparency and in order to avoid abuse of legal entities, the fourth Anti-Money Laundering Directive (nr. 2015/849) has imposed the obligation on member states to install a central register of ultimate beneficial owners of legal entities. It is believed that such a register is required in order to trace criminals who may otherwise hide behind a corporate structure. Therefore member states should ensure that legal entities, which are incorporated on their territory, provide adequate, accurate and current information on their beneficial owner, including the beneficial interests.
The deadline for conversion of this directive into national law is June 26, 2017. To this end, the Belgian legislator has drafted a preliminary proposal for a new Act on the prevention of money laundering, the financing of terrorism and the limitation of the use of cash. In this proposal, the installment of the central register is entrusted to the Administration of the Treasury department of the Federal Public Service Finance. The obligation to obtain and hold information with regard to the ultimate beneficial owner is not only applicable to companies, but also to non-profit organizations, foundations, trusts, and legal entities that are comparable to fiduciaries and trusts. The entities themselves should provide the relevant information on their ultimate beneficial owner who holds more than 25% of the shares.
In order to incorporate this obligation into existing law, a new article 14/1 will be introduced in the Belgian Companies Code, in which it is stipulated that the directors are responsible for transferring the relevant information to the Treasury department. Should they not fulfill this obligation, or should the quality of the information provided by them be very poor, the directors risk an administrative fine between 250 EUR and 50.000 EUR.
We will of course closely monitor any new developments as to the preliminary proposal and will keep you updated.