The Law of January 15th 2019 setting up a register of beneficial owner
On December 6th 2017, the Luxembourg Parliament published two bills of laws (PL 7216 and PL 7217) aimed at implementing new transparency measures provided by Directive 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (the AML 4th Directive). They, additionally, take into consideration amendments made to the AML 4th Directive by the Directive (EU) 2018/843 of the European Parliament and of the Council of May 30th 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU (the AML 5th Directive).
The PL 7217 has been analysed, discussed and adopted in parliamentary session on December 18th 2019. The law dated January 13th 2019, setting-up a register of beneficial owners, has been published on January 15th 2019 in the Luxembourg Official Gazette (Mémorial A) (the RBO Law).
CREATION OF THE REGISTER OF BENEFICIAL OWNERS
As mentioned above, the RBO Law creates a register of beneficial owners (registre des bénéficiaires effectifs) (the RBE) under the authority of the Minister of Justice, which aims to preserve and make available information on the beneficial owners of the Registered Entities.
WHICH ENTITIES ARE CONCERNED?
The RBO Law delimit the scope of concerned entities be reference to the amended law dated December 19th 2002 on the register of commerce and companies (RCSL) and the accounting and annual accounts of undertakings, which thus include amongst others: public limited liability companies (sociétés anonymes), private limited liability companies (sociétés à responsabilité limitée), corporate partnerships limited by shares (sociétés en commandite par actions), common limited partnerships (sociétés en commandite simple), special limited partnerships (sociétés en commandite spéciale), interest groupings (groupements d’intérêt économique - GIE), European interest groupings (groupements européens d’intérêt économique - GEIE), investment funds (fonds d’investissement), all mutual funds (fonds communs de placement - FCPs), civil companies (sociétés civiles), non-profit associations (associations sans but lucratif); foundations (fondations); pension savings associations (associations d’épargnes pensions); agricultural associations (associations agricoles); public establishments of the State and municipalities (établissements publics de l’Etat et des communes) (the Registered Entities).
DUTY OF INFORMATION OF THE REGISTERED ENTITIES
In addition to the above explained access to the RBE and consequently to information contained therein, Registered Entities must:
- upon simple request, within three days, provide access to all Required Information to the national authorities (see above for listing); and
- upon duly justified request, within three days, provide the first name(s), last name, nationality(ies), date and place of birth, country of residence of their BO, as well as the nature and extent of the beneficial interests they each hold to certain professionals as defined in the RBO Law by reference to article 2 of the Law 2004 (e.g. credit institutions, professionals of the financial sector, insurance undertakings and UCITS management companies, lawyers, notaries, etc.) in connection with the performance of customer due diligence measures.
DUTY OF THE BOs
With the view to allow any Registered Entity to validly comply with its obligation under the RBO Law, any BO must provide the relevant Registered Entity with the Required Information necessary to enable it to meet its obligations under RBO Law.
Technical aspects relating to the RBE like the process for (i) electronic filing with the RBE, (ii) granting access to the RBE, (iii) the research criteria upon access, (iv) supporting documents, (v) most likely fees to be paid to the LBR, etc.) shall be addressed by way of Grand-Ducal regulation which is not yet available.
- Registered Entities are subject to criminal fines ranging from Euro 1,250 to Euro 1,250,000 if they (i) fail to obtain and hold the internal file with the Required Information, (ii) omit to file Required Information to the RBE, (iii) voluntarily provided inaccurate, incomplete or obsolete information on their BO.
- BOs are subject to a criminal fine ranging from Euro 1,250 to Euro 1,250,000 in case of failure with their information duty to provide the Required Information.
ENTRY INTO FORCE
As stated above, the RBO Law has been published in the Luxembourg Official Gazette on January 15th 2019 and will come into force on March 1st 2019.
The RBO Law provides for a six months transition period starting at the entry into force. Consequently, Registered Entities and BOs must start complying with the RBO Law at the latest on September 1st 2019.
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