The Luxembourg Parliament published two new draft laws (No. 7216 and No. 7217) on December 6th 2017, in order to implement provisions of Directive EU 2015/849 on the prevention and use of the financial system for the purposes of money laundering and terrorist financing (the “4th AML Directive”).
The draft laws aim to implement the provisions of the 4th AML Directive concerning the establishment of registers of ultimate beneficial owners.
A beneficial owner is defined by the 4th AML Directive as any natural person(s) who ultimately owns or controls the customer (i.e. a corporate entity or other legal entity) and/or the natural person(s) on whose behalf a transaction or activity is being conducted. In respect of corporate entities, this definition of a beneficial owner is further specified as a natural person who ultimately holds a shareholding, controlling interest or ownership interest of at least 25% plus one share in a corporate entity. If no such person exists, then the person(s) holding the senior managerial positions in the relevant entity are considered to fall in the scope of the definition and should be recorded accordingly.
The two registries that will be implemented pursuant to the draft laws are as follows:
- A central register of the beneficial owners of entities that are registered with the Register of Commerce and Companies in Luxembourg except for those entities that are admitted to trading on a regulated market in Luxembourg or elsewhere (registre des bénéficiaires effectifs or REBECO);
- A central register of beneficial owners of fiduciary arrangements (Registre des Fiducies)
The REBECO is to be established by and under the authority of the Minister of Justice.
The Register of Commerce and Companies (RCSL) is responsible for the management, registration and safeguard of the information. The registration of the information on REBECO will be carried out in accordance with detailed rules to be laid down by Grand-ducal Regulation.
The draft law sets out a list of information on beneficial owners that must be provided and kept up to date in REBECO including name, date and place of birth and address.
In the case of a company winding up, REBECO will still retain the information for the following five years.
Access to REBECO will be given to national authorities such as the CSSF, the CAA and tax administration and the police. Self-regulatory bodies such as the bar association or the association of notaries will be allowed to access some information.
Limited access to the REBECO may also be granted to any person (s) who:
- can demonstrate a legitimate interest in relation to AML;
- is resident in Luxembourg; and
- has made an official written and duly justified request in this respect.
Registre des Fiducies
Each fiduciary agent shall obtain and keep at its registered office information in relation to the beneficial owners of each fiduciary arrangement for which it acts as a fiduciary agent. Such information is to be kept for a period of five years following the cessation of their activities in relation to such fiduciary arrangement.
The Administration de l’Enregistrement et des Domaines (“AED”) shall maintain the Registre des Fiducies. Every fiduciary contract with a Luxembourg fiduciary agent that generates tax consequences must be inscribed in the register.
A registration number will be assigned to each fiduciary contract. The draft law sets out a list of information on the various parties involved in the fiduciary contract (such as the constituent, fiduciary agent and beneficiaries) that must be provided and kept up to date in the register.
Access to the Registre des Fiducies will be given to the national authorities (as set out above).