In view of the unwavering attention from the European regulator for the prevention of money laundering and terrorist financing, the aforementioned provisions were introduced with the Act of 18 September 2017, which transposes the fourth anti-money laundering directive (Directive 2015/849) to Belgian law.
The commentary below only highlights the new obligations for companies under Belgian law. Similar obligations for international non-profits, foundations, trusts and other legal entities comparable to trusts fall outside the scope of this summary.
Adequate, accurate and current and on pain of a fine
To allow for the correct establishment of the UBO register the members of the administrative body of every company under Belgian law – regardless of its legal form – are required to obtain and hold adequate and accurate information about their ultimate beneficial owners and the economic interests held by them, and to keep said information up-to-date.
An ‘UltimateBeneficial Owner’ is defined as:
‘Any natural person who ultimately owns or controls the customer or the customer’s representative and/or the natural person(s) on whose behalf a transaction or activity is being conducted or business relationship is established’ (see also section 4(1) under 27 of the Act of 18 September 2017).
More in particular for companies, this means:
1. The natural persons who directly or indirectly hold a sufficient percentage of the voting rights or ownership interest in the company. An interest of more than 25% of the company’s voting rights, shares or capital held directly or indirectly, alone or together with others, shall be an indication of a sufficient percentage of the voting rights or the ownership interest.
2. The natural persons who control the company by other means; and
3. If after having exhausted all the possible means none of the persons described under (i) or (ii) is identified, or if there is any doubt that the identified person(s) is/are the beneficial owner, the natural person(s) who hold(s) the position of ‘senior managing official.’ (see also section 4(1) under 27 of the Act of 18 September 2017).
Of all the beneficial owners at least the following information shall be collected: the name, date of birth, nationality and address of the beneficial owner, as well as the nature and extent of the beneficial interest held by the beneficial owner.
This information must be recorded electronically in the UBO register within one month after it is known.
If the members of the managing body fail to meet these new obligation, they expose themselves to fines ranging from EUR 50 to EUR 5,000 (see section 14(2) of the Companies Code).
In addition, the above-mentioned data must also be provided to the long list of economic players who are subject to the obligations set forth in the Act of 18 September 2017 AND who must apply customer due diligence (credit institutions, insurance companies, notaries, bailiffs, external accountants, etc.).
Not enforceable in the short run
In the short run these new obligations are practically unenforceable because the required Royal Decree is apparently delayed and not expected to enter into force before the third quarter of 2018.
The Decree will include all the working methods of the UBO register, such as:
- who will have access to the information in the UBO register and how access will take place;
- which deviations exist for the data in the UBO register to be non-accessible or only partly accessible;
- which checks will be performed in view of the obligation to transmit data to the UBO register;
- how the data transferred to the UBO register will be protected and processed.
Pending the entry into force of the Royal Decree, careful and forward-looking directors may already prepare for the above-mentioned obligations by:
- appointing a legal representative or proxy holding an e-ID who can fill out the information via the electronic platform MyMinFin on behalf of the company;
- holding accurate and extensive information about the beneficial owners of the company and all the legal entities used by the beneficial owners to control your organisation;
- holding evidence that the information is indeed adequate, accurate and current;
- ensuring that procedures are in place at the company so that each change in the information about your beneficial owners will be transferred to the UBO register within the mandatory one month’s term.