The Netherlands is to introduce a public register of Ultimate Beneficial Ownership (UBO) as part of its commitment to fighting money laundering and terrorism financing under the EU Anti-Money Laundering (AML) Directives. With a start date of September 2020 and completion due by March 2022, the clock is now ticking.
You have 18 months to comply
The final step came on 23 June 2020, when the Dutch Senate (de Eerste Kamer) adopted the implementation act needed to create the UBO Register. The legislation amends, amongst other acts, the Dutch Commercial Register Act 2007 and the Money Laundering and Terrorist Financing (Prevention) Act (Wwft).
As a result of the implementation, organisations must register their Ultimate Beneficial Owner in the UBO Register as of 27 September 2020. The register is managed by the Dutch Chamber of Commerce and the Dutch government has set an implementation period of 18 months.
Who must act?
The obligation to register Ultimate Beneficial Ownership applies to the following entities incorporated in the Netherlands:
- Private limited liability companies
- Public limited liability companies
- Associations with full or limited legal capacity operating a business
- Mutual insurance associations
- Professional, commercial and limited partnerships
- European public limited companies (SE)
- European cooperative companies (ECC)
- European economic interest groupings with their registered office in the Netherlands (EEIG).
UBO is part of KYC compliance
UBO registration is part of a more extensive compliance process known as Know-Your-Customer (KYC). Under this process, regulated entities must identify and screen all parties involved in their business and business transactions. These business relations will need to be analysed to determine the compliance risk profile, e.g. a check on criminal records, whether they appear on sanctions lists or could be qualified as a Politically Exposed Persons (PEPs).
The KYC workstream is mainly administrative and time consuming in nature, e.g. handling requests from banks and regulators for information regarding the legal structure of specific entities and UBO identification.
UBO identification and registration
The Ultimate Beneficial Owner(s) of a legal entity is/are the natural person(s) which/who:
- directly or indirectly hold more than 25% of the shares, voting rights or the ownership interest in the legal entity;
- who through other means ultimately own or control the legal entity, e.g. effective control or the right to appoint or resign members of the Board of Directors.
Identifying the UBO in an organisation can be challenging. For example, some legal entities may be located in a foreign country. This UBO identification process requires the collection, analysis and verification of shareholder registers and legal structures.
Cost-efficient quarterly and half-yearly reviews
All KYC-related records are expected to be updated from time-to-time, with the frequency reflecting the perceived degree of risk. Thanks to years of experience in reviewing corporate structures, legal entity management and conducting regular reviews, Legadex can help you to manage and structure this quarterly and half-yearly review process. This means you can continue to focus on advisory tasks while being certain that your KYC compliance process is in experienced hands. Whether you are a scale-up or medium-sized businesses, private equity or pension fund, we can help you to optimise your compliance process with a solution that starts from just €750 per month, depending on your monthly needs.
For more information, please contact Morad Kada or Luc van Daele:
T: +31 (0)20 82 08 396
Luc van Daele
T: +31 (0)6 20 61 31 36