It was already clear that the UBO register would have to be established. After all, the fourth European Anti-Money Laundering Directive requires the Netherlands to introduce such a register. It must be in place by 10 January 2020 at the latest. Consequently, the bill submitted to Parliament for the implementation of the UBO register.
UBO
The abbreviation UBO stands for Ultimate Beneficial Owner. In other words: the person who ultimately benefits from an entity. Any natural person holding an interest of more than 25% in a public limited company (NV), private limited company (BV), foundation or limited partnership (CV) must be registered as a UBO. In the case of indirect interests, the structure is examined layer by layer until a UBO is identified.
If no one holds a 25% interest, a pseudo-UBO is registered. This is then (usually) the (ultimate) director as specified in the entity’s articles of association.
The UBO register does not include the UBOs of open-ended mutual funds. However, a separate bill will be introduced to establish a register for trusts and trust-like entities. This register will include, amongst other things, the UBOs of open-ended mutual funds.
The explanatory notes to the bill introduce a special UBO. This refers to a person who receives a payment from a foundation that exceeds 25% of the maximum amount the foundation may pay out in any given year.
UBO register
The UBO register is maintained by the Chamber of Commerce. The following details of the UBO are recorded: name, month and year of birth, country of residence, nationality, and the nature and extent of the economic interest. The interest is not recorded precisely, but is categorised into the following classes: 25% – 50%, 50% – 75% and 75% – 100%.
Certain additional details relating to the UBO can only be accessed by the competent authorities. These include: date, place and country of birth, address and BSN/TIN. It is possible to request the Chamber of Commerce to restrict access to this information. In such cases, it must be demonstrated that the UBO is exposed to a disproportionate risk or that there is a risk of fraud, abduction, blackmail, extortion, harassment, violence or intimidation. Redaction is also possible for minors and persons who are otherwise legally incapacitated.
Resistance
Following the online consultation, the bill was the subject of considerable criticism. However, the final bill differs only slightly from the draft that was submitted.
In its implementation review that the UBO register is unlikely to contribute significantly to its intended purpose: combating fraud and money laundering. The bill is open to abuse, and enforcement will be only of limited effectiveness.
We are keen to know what Parliament’s views are on the bill.