Persons with Significant Control
The following individuals are Persons with Significant Control (“PSC”):
All individuals with significant control over a company will be registerable unless they are non-registerable. An individual will be non-registerable if they do not hold any interest in the company except through one or more other legal entities over each of which they have significant control and each of which is a “relevant legal entity” (see below) in relation to the company.
Registrable and Relevant Legal Entities (“RRLE”)
A legal entity may be required to include information in relation to other legal entities in its own register of beneficial ownership if those entities are registrable and relevant. An entity is a “relevant legal entity” if:
(i) it would have come within the definition of a person with significant control over the company if it had been an individual; and
(ii) it is subject to its own disclosure requirements. Legal entities are registrable if they do not fall into the category of non-registrable entities. A legal entity is “non-registrable” if it does not hold any interest in the company except through one or more other legal entities over each of which it has significant control and each of which is also a relevant legal entity in relation to the company.
UK companies must take reasonable steps to determine whether someone is a registerable person or RRLE. The company must send notice to anyone whom it knows or has reasonable cause to believe to be a registrable person or a RRLE in relation to the company. The notice must call on that person or entity to state whether or not they are a registerable person or RRLE (as applicable) and if so, confirm if their particulars as set out in the notice are correct and supply any missing particulars. An addressee is bound to comply with the notice within one month. In addition, an entity or person which subsequently discovers they are a RRLE or registerable person must contact the company within one month of obtaining this knowledge. There are ongoing obligations on the company and others to keep information up to date. Examples of the type of particulars which must be included on the register are name, service address or usual place of residence, the date on which an interest in the company was acquired and the nature of the control over the company.
The PSC register is available to the public subject to limitations. Any person with a proper purpose can make a request for access to the register. If a company believes the request was not made for a proper purpose they can apply to court within five working days of receipt of the request and reply to the request saying that they have done so.
The Irish Department of Justice has opined that under AMLD, Member States have the discretion to allow unfettered access to the beneficial ownership information contained in the register. It should also be noted that AMLD provides that access to information on beneficial ownership shall be in accordance with data protection rules and that access may be subject to online registration and payment of a fee (not to exceed the administrative costs for obtaining the information). AMLD also permit Member States to provide for an exemption from access to information on a case by case basis in exceptional circumstances where such access would expose the beneficial owner to a risk of fraud, kidnapping, blackmail, violence or intimidation. It will be interesting to see the approach which Ireland takes on the extent of public access to beneficial owner information.
Penalties for Non- Compliance
It is a criminal offence under UK law not to respond to a notice without a valid reason. Criminal penalties may also be imposed for providing false or misleading information. A further consequence of the failure to respond to a notice could be that a PSC or RRLE may lose their rights in a company or have their rights suspended such as the right to vote, the right to receive dividends or to transfer shares. Irish persons with an interest in UK registered companies (including Irish registered companies) must be cognisant of these potential penalties and act diligently to respond to any notice they receive from any of said UK companies.
The AMLD is far more extensive than the regime under the SBEEA 2015 as it applies to all legal entities and not just companies. It will be necessary for the UK to enact further domestic legislation in order to comply with all of the provisions of the AMLD. The Irish legislature must also keep this in mind in order to give full effect to the AMLD.
In January 2016, the Department of Finance and the Department of Justice held a joint consultation process on the AMLD and the Funds Transfer Regulation. The results of this public consultation process have not yet been published. On the 8 June 2016, the Oireachtas also published its Government Legislative Programme for Bills that the Government are seeking to publish in the coming months. Included amongst the list is a Criminal Justice (Money Laundering & Terrorist Financing) (Amendment) Bill (the “Bill”) which is intended to give effect to the AMLD and the heads of the Bill are expected by the end of 2016.
It is important that Irish registered companies and those with a beneficial interest in them monitor the progress of the Bill which will transpose the AMLD. The deadline for transposition of the AMLD is 26 June 2017 and domestic legislation must be introduced before the expiration of this period. If Ireland does not implement legislation before this date, it could be liable to financial penalties.
For further information, please contact Sean O’Reilly, Associate, Corporate and Commercial Department, Ronan Daly Jermyn. Tel: +353 (0)21 4802700 Email: firstname.lastname@example.org