Pursuant to and in compliance with the AML 4th Directive amended by the AML 5th Directive, Luxembourg parliament enacted the law of 13 January 2019, setting-up a register of beneficial owners (“BOs”) (“RBO Law”).
The RBO Law creates a register of BOs (“RBE”), which aims to preserve and make available information on BOs of registered entities.
The scope of the RBO Law is large and covers all forms of commercial companies as well as investment funds (fonds d’investissement), all mutual funds (fonds communs de placement - FCPs), non-profit associations (associations sans but lucratif); foundations (fondations); pension savings associations (associations d’épargnes pensions) etc. Companies listed on regulated markets fall within the scope of the RBO Law as well.
In particular, the RBO Law requires registered entities to determine their BOs based on a definition by reference to the AML law of 2004. In substance, a first arithmetical test must be performed to determine possession; failure of which requires a second test (quality test) to determine control. If, after exhausting all possible means no person(s) could be identified as beneficial owner(s), any individual holding the position of senior manager must be taken into consideration for registration into the RBE.
The RBO Law requires the registered entities to register BOs (or the senior managers) in the RBE with a determined set of information (the name; first name(s); nationality; day, month, year and place of birth; country of residence; for natural persons, identification number provided for by the amended law of 19 June 2013 on the identification of natural persons or similar for non-resident; nature and scope of interests held).
Additionally, registered entities must as well collect and maintain, at their registered office, the same information into an internal register which may be consulted by national authorities. In any case, such information must at all times, be adequate, accurate and up-to-date as well as the supporting documents relating thereto.
Access to the RBE by national authorities (e.g. the public prosecutor, investigating judges, the cellule de renseignement financier, the judicial police officers), within the scope of their duties is unrestricted whereas access by the public is restricted; the public will have no access to the addresses and national or foreign identification numbers of the BOs.
This being said, it is possible for BOs, on an exceptional basis, to request restriction of access in specific exceptional circumstances where such access would expose BOs to a disproportionate risk. However, such restriction of access is only granted subject to stringent conditions and, if granted, a specific notice to that effect will be published in the RBE.
Failure by the registered entities and the relevant BOs to comply with their respective obligations deriving from the RBO Law will be subject to criminal fines of up to Euro 1,250,000.
The RBO Law entered into force on March 1st 2019 and will benefit from a 6 months grace period. Consequently, registered entities and BOs must start complying with the RBO Law at the latest on September 1st 2019. For more information please read the full text of our article available on https://www.bsp.lu/publications/newsletters-legal-alerts/legal-alert-law-january-15th-2019-setting-register-beneficial