What Needs to Be Done, and by When?
Flows of money derived from illegal activity can damage the integrity, stability and reputation of the financial sector and threaten the Union’s internal market as well as international development. Accurate and up-to-date information on the ultimate beneficial owner is a key factor in tracing criminals who might otherwise hide their identity behind a corporate structure. For this reason, the European Union adopted the Directive [1] on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, which, among other things, introduces from 1.11.2018 for legal entities entered in the relevant register an obligation to enter the identification details of the ultimate beneficial owner in that register.
The details to be registered are:
- first name and surname,
- birth number, or date of birth if no birth number has been assigned,
- address of permanent or other residence,
- nationality, and
- type and number of identity document
together with the details establishing the person’s status as ultimate beneficial owner under Act No. 297/2008 Coll. on the Prevention of Legalisation of Proceeds of Criminal Activity and Terrorist Financing and on amendments to certain acts (the “Anti-Money Laundering Act”). This entry does not, however, replace the obligation to register the ultimate beneficial owner of a public-sector partner under Act No. 315/2016 Coll. on the Register of Public Sector Partners and on amendments to certain acts (the “RPVS”).
Ultimate Beneficial Owner
Under the Anti-Money Laundering Act, an ultimate beneficial owner is any natural person who actually owns or controls a legal entity, a natural person – entrepreneur or an association of assets, and any natural person for whose benefit these entities carry out their activities or transactions.
The Anti-Money Laundering Act gives a non-exhaustive list stating that a natural person derives their status as ultimate beneficial owner in particular:
- from their ownership position (holding a direct or indirect interest, or a combination of both, of at least 25% of the voting rights or share capital of the legal entity, including bearer shares),
- from influence over the top management bodies (having the right to appoint, otherwise designate or remove these bodies or their members),
- from other control over the legal entity (Section 66a of the Commercial Code), or
- from receiving at least 25% of the economic benefit from the business or other activity of the legal entity.
Where the ultimate beneficial owner cannot be identified using these general criteria, the ultimate beneficial owner of the legal entity is deemed to be a member of senior management, i.e. the statutory body, a member of the statutory body, a holder of commercial power of attorney (prokurista) or a senior employee reporting directly to the statutory body.
Who Is an Ultimate Beneficial Owner?
An ultimate beneficial owner is also a natural person who does not personally meet these criteria but who, together with another person acting in concert or jointly with them, meets at least some of them.
The obligation to disclose details of the ultimate beneficial owner also applies to legal entities entered in the Commercial Register by 31 October 2018. These entities must file, by 31 December 2019, an application to register the details of their ultimate beneficial owner in the Commercial Register.
The application to register details of the ultimate beneficial owner is filed on the form prescribed by Decree No. 25/2004 of the Ministry of Justice of the Slovak Republic, which sets out the model forms for applications for entry in the Commercial Register and the list of documents to be attached. No additional documents evidencing the facts to be verified under the law need to be submitted in support of the details of the ultimate beneficial owner. The legal entity must keep these documents itself; they will therefore not need to be filed with the registry court for the collection of deeds, nor will the registry court check, when assessing the application, whether the details given match those in the attached documents. These facts may be verified as part of the obliged entity’s basic customer due diligence, or by the Financial Intelligence Unit and other competent authorities. The details of the ultimate beneficial owner entered in the Commercial Register are not published.
Our Services
We will provide you with legal advice on anti-money laundering, draw up the necessary internal documents and arrange for the details of the ultimate beneficial owner to be entered in the Commercial Register.
For further information, call us on +421 2 3305 9681 or write to info@navratlaw.com and we will advise you on your situation.
[1] Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC.