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  • Compliance & Business Integrity
  • 07-02-2017

Pursuant to the EU’s Fourth Anti-Money Laundering Directive, all EU Member States are setting up UBO registers.

These central national registers will include details of (natural) persons who can be classified as the ultimate beneficial owner (UBO) of an entity. Briefly, the UBO is either the ultimate owner of the entity, someone who controls the entity, or someone with an interest of (at least) 25% in the entity. If nobody within the entity meets one of these definitions, then the person who has the authority to dismiss the director(s) or a member of the senior management can also be classified as the UBO.

Information to be entered in the UBO register will in any case include the UBO’s name, month and year of birth, nationality, country of residence, and the nature and extent of the economic interest held. The Minister of Finance also wants additional information to be made available for competent authorities and financial intelligence units, such as the UBO’s date, place and country of birth, address, Citizen Service Number (BSN) and/or foreign tax identification number, information about his/her identification document records supporting why he/she is the UBO, and the size of the corresponding (economic) interest.

The EU hopes that introducing central national UBO registers will make information about the UBO’s behind entities more transparent and accessible, thus making it easier to detect criminals who conceal their identity behind a corporate structure.
But in our opinion, the proposal to make the Dutch UBO register publicly accessible – as provided for in the parliamentary bill for its creation – is going a step too far. The proposed public nature of the register not only affects the privacy of the UBO but can also be a threat to his safety. After all, it will also make it easier for people with bad intentions to find out who has what economic interest. It’s true it will still be possible to restrict access to the information in the event of an “exceptional situation” – i.e. if there is a risk of fraud, kidnapping, or blackmail – but the UBO must then submit an objection him/herself and prove the existence of such an exceptional situation.

All this will take quite some time: Member States must comply with the EU’s Fourth Anti-Money Laundering Directive by no later than 26 June 2017, and they must have set up their UBO register by 24 months after the Directive’s entry into force. The register must become accessible within a period of 36 months. Nevertheless, given the potentially far-reaching consequences, we recommend that you submit an objection at an early stage so that the “exceptional situation” can be demonstrated and access to the information can be restricted. If you want to know what the UBO register will mean for you and how to submit a successful objection, then don’t hesitate to ask us to advise.

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