On 20 May 2015, the European Parliament adopted the proposal for the EU Anti-Money Laundering Directive (also known as the Fourth Anti-Money Laundering Directive). This directive aims to combat money laundering and, by extension, the financing of terrorism. One of the consequences of this Anti-Money Laundering Directive is that, from mid-2017, certain personal details of the ultimate beneficial owners of a legal entity will be recorded in a register. Ultimate beneficial owners are – in short – the following natural persons:
- those who are entitled to at least 25% of a legal person’s assets;
- those who hold a stake of 25% or more in the share capital of a legal person;
- those who are able to exercise at least 25% of the voting rights in a legal entity.
All EU Member States must obtain and hold “sufficient, accurate and up-to-date information” on the ultimate beneficial owners. This must include, at the very least, the following details:
- the name;
- year and month of birth;
- nationality;
- country of residence;
- the nature and extent of the interest.
Many clients will have reservations about the proposed register. This is because, particularly within family businesses, there are various conceivable reasons for not wishing to be named. Often, arrangements have been put in place to ensure that the information now required to be included in the register is not shared with the outside world.
The register will be accessible to:
- competent authorities and financial intelligence units in the EU;
- entities subject to reporting requirements (e.g. banks and notaries);
- the audience.
In particular, public access means that beneficiaries‘ privacy will ultimately be affected. The public will therefore only be granted access to the extent that a ’legitimate interest‘ can be demonstrated. No specific definition of this concept is provided. We believe it is important that, when implementing the Directive, the Netherlands adopts a strict interpretation of this ’legitimate interest’, in order to safeguard privacy as much as possible.
EU Member States are, incidentally, permitted to refuse access to the information in the register, either in whole or in part, to entities subject to the reporting obligation and to the public. For this to apply, there must be exceptional circumstances relating to the ultimate beneficiaries, such as a high risk of kidnapping or blackmail.