Important new regulations imminent for businesses as new Beneficial Ownership Register to be established by Companies Registration Office.
As part of measures to tackle white collar crime, companies based in Ireland will have until the end of November to submit information on their beneficial owners to a central register or risk significant fines, according to law firm Mason Hayes & Curran.
EU-wide regulations to counter money laundering
Corporate Governance Specialist, Nick Metcalfe of Mason Hayes & Curran said,
The new regulations form part of EU-wide measures against white collar crime and specifically to counter money laundering. They will require compliance by the majority of businesses in Ireland who will have until the end of November to submit information on their beneficial owners or potentially face significant fines.
“Under the new Regulations, when the relevant part comes into force, existing companies and other bodies corporate will have 5 months to submit information on their beneficial owners, and newer bodies will have 5 months from incorporation. Fines for companies failing to properly keep a register, or to comply with requests from authorities, will be up to a maximum of €500,000, and there is provision for custodial sentencing of up to 12 months for knowingly or recklessly providing false information.”
Timely access to information on internal registers
Each body corporate (to which the 2019 Regulations apply) is required to provide the Gardaí, the Revenue, the Criminal Assets Bureau and other competent authorities with timely access to information on their internal registers. The Irish authorities can then also share that information with corresponding authorities in other member states of the EU. Competent authorities in this regard include the Central Bank, the Law Society and the Bar Council, among others.
Organisations who are obliged to carry out customer due diligence can also request details of the information on a relevant entity’s internal register as part of their due diligence.
Once the central register is established, relevant entities will be required to submit their beneficial owners’ details (including each beneficial owner’s name, residential address, nationality, date of birth, PPS number and the nature and extent of their ownership or control) to the central register. However, the PPS number will be redacted and will not be made available for inspection.
Access (almost) all areas
The Gardaí, the CAB, the Financial Intelligence Unit (FIU) and other competent authorities (such as the Law Society or the Bar Council) will be entitled to all the information (except PPS numbers) on the register, subject to certain safeguards. That is, the request must come from an individual of or above a specified position or rank, acting on the authority of an individual of or above a specified higher rank or position.
Organisations required to conduct customer due diligence (such as banks or law firms) will have a right of access to limited information, being a beneficial owner’s name, country of residence, nationality, month and year of birth and the nature and extent of ownership and control.
Members of the public will also be entitled to inspect that limited information on the register.
Where the beneficial owner is a minor, the person conducting customer due diligence or member of the public must demonstrate to the Registrar that there is a public interest in them having the information.
Where an organisation required to conduct customer due diligence, or a State body which accesses the central register, forms the opinion that there is a discrepancy between the information on the central register and the information held internally by a company, they are required to advise the Registrar of that opinion. The Registrar will then ask the company in question to explain this discrepancy or correct it.
The Registrar will be able to charge a fee to persons required to conduct customer due diligence and to members of the public. Custodial sentences of up to 12 months can be imposed on any person who makes a statement to the Registrar which is false in a material particular, and does so knowingly or recklessly.
“Some aspects of the regulation need to be clarified before the central register is established, however it is clear that it will provide significant further powers to authorities and will also provide for further openness and transparency in the business environment in the interests of tackling white collar crime,” said Nick Metcalfe.