In order to (further) step up the fight against fraud and money laundering, every ultimate beneficial owner of a legal entity will soon have to be fully disclosed in the UBO register.
UBO register
Under the Fourth European Anti-Money Laundering Directive, the Netherlands is required to establish a UBO register by 26 June 2017 at the latest. Finance Minister Dijsselbloem stated in a outline letter on 10 February 2016, the government’s ideas regarding this register were outlined. And in a letter On 26 April 2016, Dijsselbloem answered parliamentary questions on this subject.
The intention is for the Dutch UBO register to be a public register. However, four privacy safeguards will be built into the system.
- Every user of the UBO register is registered.
- A fee is charged for access to the documents.
- Users, other than specifically designated authorities and the Financial Intelligence Unit of the Netherlands (FIU-NL), are granted access to a limited set of data.
- Where there is a risk of kidnapping, blackmail, violence or intimidation, a detailed risk assessment is carried out on a case-by-case basis and, where necessary, certain information relating to specific UBOs is withheld.
UBO
UBO stands for Ultimate Beneficial Owner. Loosely translated into Dutch, this refers to the person who pulls the strings within a company (or other designated legal entity). It refers to the person who has de facto control over the entity. Indications of this include, for example, holding a sufficient percentage of the shares and/or voting rights, or having the (contractual) right to dismiss directors.
Entities
The register will include the UBOs of companies and other legal entities incorporated in the Netherlands. For the most part, this will correspond to the entities currently listed in the Commercial Register (Chamber of Commerce).
In addition, consideration is being given to including the UBOs of a mutual fund in the UBO register.
Sanction
Entities whose UBOs are included in the register are required to:
- to provide the necessary information to the register administrator;
- to keep the UBO information in their own records up to date, accurate and complete.
The UBO is under an obligation to cooperate. The UBO must provide the necessary information to the entity of which he is the UBO.
Failure to comply with these obligations is classified as an economic offence.
Legislation
A European directive does not have direct effect. The Fourth Anti-Money Laundering Directive will therefore also have to be transposed into Dutch law. The letters mentioned above mark the start of the process of enacting this legislation.