Company owner register mandatory in EU
European Union member states will have to keep a central register of the ultimate ‘beneficial’ owners of corporate and other legal entities, as well as trusts, a new anti-money laundering directive has mandated. A ‘beneficial’ owner actually owns or controls a company and its activities and ultimately authorises transactions, whether such ownership is exercised directly or by a proxy.
The central registers will be accessible to the authorities and their financial intelligence units (without any restriction), to ‘obliged entities’ (such as banks conducting their ‘customer due diligence’ duties), and also to the people with a ‘legitimate interest’, such as journalists.
To access a register, a person will have to demonstrate a ‘legitimate interest’ in suspected money laundering, terrorist financing and in ‘predicate’ offences that may help to finance them, such as corruption, tax crimes and fraud.
These persons (for example, investigative journalists) could access information such as the beneficial owner's name, month and year of birth, nationality, country of residence and details of ownership. Any exemption to the access provided by member states will be possible only ‘on a case-by-case basis, in exceptional circumstances’.
The new anti-money laundering directive aims to help to fight money laundering, tax crimes and terrorist financing. New rules to make it easier to trace transfers of funds were also approved.
These central registers were not envisaged in the European Commission’s initial proposal, but were included by MEPs in negotiations. The text also requires banks, auditors, lawyers, real estate agents and casinos, among others, to be more vigilant about suspicious transactions made by their clients.