News 9/2018

Registration of beneficial owners

The register of information regarding the beneficial owners of legal entities (hereinafter the “register of beneficial owners”) has been in operation for almost one year. As we previously informed you in November 2017, in our News 17/2017, the register of beneficial owners was established so that legal entities entered in a public register (e.g. the Commercial Register) and trust funds could register their beneficial owners in order to comply with the Act on certain measures against the legalization of  proceeds from crime and terrorist financing (the “AML Act”).

The statutory deadline for registration in the register of beneficial owners to be met by trading companies is 1 January 2019.

Thus by this date, legal entities should have arranged to have their beneficial owner registered and should submit documents proving both the beneficial owner’s identity and the fact that the person is the beneficial owner. Which person is the beneficial owner and which documents proving their identity and position are to be presented for registration in the register of beneficial owners is to be ascertained according to the AML Act. Such an assessment might be relatively time-consuming, in particular as regards legal entities with foreign beneficial owners or with a complex ownership structure.

The registered information regarding beneficial owners should be regularly updated after registration. If the beneficial owner, or any relevant information, should change then an application for the entry of such a change should be filed immediately the event has occurred.

Thus, the obligations of legal entities relating to beneficial owners continue even after the end of this year’s deadline for initial entry in the register.

According to the AML Act, legal entities are obliged to actively keep regular records and updates of the information to verify the identity of their beneficial owner, including the reasons why the person possesses the status of beneficial owner or other reasons why such a person is considered to be a beneficial owner. This obligation to regularly identify one’s own beneficial owner applies regardless of whether or not the entry in the register of beneficial owners has already been made.

In light of the above, in particular considering the forthcoming expiry of the statutory deadline for entry in the registry of beneficial owners, it is recommended that legal entities to which the registration of beneficial owners applies and which have not yet done so should arrange for entry in the register of beneficial owners as soon as possible.

If you require any further information and/or advice on the process of entry and the necessary steps related thereto, please feel free to contact us.