Beneficial Ownership in Ireland

Since the introduction of the European Union (Anti Money-Laundering: Beneficial Ownership of Corporate Entities) Regulations 2016 (the 2016 Regulations), all registered companies in Ireland have been required “to take all reasonable steps to obtain and hold adequate, accurate and current information” in respect of their beneficial owners in an internal beneficial ownership register. The 2016 Regulations came into operation on 15 November 2016 and formed part of the Irish implementation of the 4th Anti-Money Laundering Directive (4AMLD). 4AMLD also required EU countries to establish a central register of beneficial ownership where information on the beneficial ownership of corporate entities is to be held and made available to the public.

The European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019 (the 2019 Regulations) were signed on 22 March 2019 and replaced the 2016 Regulations. In addition to requirements surrounding the obtaining of further information from beneficial owners, such as Personal Public Service (PPS) numbers, the 2019 Regulations established a Central Register of Beneficial Ownership of Companies and Industrial and Provident Societies (the Central Register) and required relevant entities to transmit beneficial ownership information to the Central Register. The 2019 Regulations also established the persons who may have access to the information held in the Central Register, and provided for reporting by competent authorities and "designated persons" of discrepancies on the Central Register.

The 2019 Regulations apply to all Irish companies, with the exception of a company or other body corporate that is (a) listed on a regulated market that is subject to disclosure requirements consistent with the law of the European Union, or (b) subject to equivalent international standards which ensure adequate transparency of ownership information.

Who is a Beneficial Owner?

A beneficial owner is any natural person who ultimately owns or controls a corporate entity, either through direct or indirect ownership of more than 25% of the shares, voting rights or ownership interest in an entity, or who exercises ultimate control of an entity via other means, such as through a shareholders’ agreement, via the exercise of dominant influence or through the power to appoint senior management.

Furthermore, if a relevant entity is a subsidiary owned by another corporate entity, any natural person who holds or controls a shareholding of more than 25%, or an ownership interest of more than 25% in the parent corporate entity, is deemed to be a beneficial owner of the subsidiary. Where a relevant entity is a subsidiary owned by multiple corporate entities, a shareholding of more than 25% or an ownership interest of more than 25% in a subsidiary held by multiple corporate entities which are under the control of the same natural person, shall be an indication of indirect beneficial ownership.

Where it is found that there is no natural person who qualifies as a beneficial owner in accordance with the conditions set out above, the details of the “senior managing officials” of the company are to be recorded on the company’s beneficial ownership register instead.

Required Disclosures

The following information must be disclosed to the Central Register for each beneficial owner:

• Name

• Date of Birth

• Nationality

• Home Address

• PPS Number (if applicable) or an RBO Transaction Number (see below for details)

• Details of the nature and extent of the interest and/or control held

For any beneficial owners who do not have an Irish PPS number, a BEN2 Form (Declaration as to Verification of Identity) must be submitted to the Central Register. The beneficial owner must sign and have witnessed a declaration confirming their name, date of birth, nationality and address.

Regardless of the number of companies in respect of which an individual qualifies as a beneficial owner, only one BEN2 Form is required to be submitted. Upon submission of the BEN2 Form, the beneficial owner is then assigned a unique RBO Transaction Number which can be used for any future filings.

Timeline

Existing companies were initially required to file their beneficial ownership information with the Central Register on or before 22 November 2019. All newly incorporated companies have five months from their date of incorporation to file the required disclosures with the Central Register. There is an ongoing obligation to keep the register up-to-date, with any changes in beneficial ownership to be updated on the central register within 14 days.

Sanctions

The 2019 Regulations increased the sanctions for non-compliance to include the possibility of conviction on indictment and a €500,000 fine for certain breaches, a substantial leap from the maximum fine of €5,000 as per the 2016 Regulations.

Custodial sentences of up to 12 months can be imposed on any person who knowingly or recklessly makes a materially false statement to the registrar.

Access

The 2019 Regulations also introduced changes in relation to access to information. There are now two categories of access to the information on the beneficial ownership of companies – “unrestricted access” and “restricted access”.

Unrestricted or Tier 1 access is only available to authorised officers of named state law enforcement and regulatory bodies such as An Garda Síochána, the Revenue Commissioners, the Criminal Assets Bureau, the Department of Justice and Equality, the Central Bank of Ireland, the Property Services Regulation Authority, the Director of Corporate Enforcement and the Law Society of Ireland. Tier 1 access allows the above parties to access all the data disclosed to the Central Register with the exception of PPS numbers.

Restricted or Tier 2 access which applies to all other parties, including the general public and designated persons required by part 4 of the 2010 Criminal Justice (Money Laundering and Terrorist Financing) Act, as amended, to conduct customer due diligence, allowing such parties, on payment of a small fee, to view the full name, month and year of birth, nationality, country of residence and the statement on the nature and extent of the beneficial interest held. Tier 2 access does not allow such parties to view the day of birth or residential address of beneficial owners.

Get in touch

As the obligations on companies in relation to the disclosure of their beneficial owners are becoming more onerous and as the implications for non-compliance are increasingly more costly, you may wish to outsource compliance with these regulations to a trusted service provider with the correct experience and local knowledge to provide assurance that your companies are fully compliant. Our dedicated team will be happy to provide you with further information.

Please contact: Máiréad Lyons and Kelvin McHugh