The 5th EU Anti-Money Laundering Directive
In December 2017, the 5th Anti-Money Laundering Directive, a revision of the 4th Directive, was launched after the Panama Papers leaked the extent to which anonymously owned companies were facilitating money laundering and tax evasion. The aim of the 5th Directive is to further improve transparency in relation to beneficial ownership.
Requirements of the 5th Directive include:
- That all 28 EU member states establish a register of beneficial owners of companies and business-related trusts, which is accessible to members of the public. Registers of beneficial ownerships of trusts and similar legal arrangements may only be made public where legitimate reasons have been given.
- Information on national bank accounts and safe deposit boxes will need to be registered, as well as information on real estate ownership.
- Member States retain the right to provide broader access to information according to their national laws.
The 4th Anti-Money Laundering Directive (4AMLD), came into force in June 2017 and required European Union member states to disclose information about their Ultimate Beneficial Owners (UBOs) to the Central Register of Beneficial Ownership (CRBO).
Definition of a Beneficial Owner Across EU Member States
A beneficial owner is defined as a natural person who ultimately owns or controls, either directly or indirectly, 25% of the shares or voting rights of a legal entity or trust, or exercises influence or control over a legal entity or any other legal arrangement.
The obligation of registering a UBO applies to business owners who reside in the EU or EEA or where a UBO resides elsewhere but has a business that operates in the EU or EEA.
The UBO Register must contain the following minimum details regarding the beneficial owner:
- Name of UBO
- Date of Birth
- Country of Residence
- Official identification document, i.e. a passport
- The role of the UBO
- The nature and size of the beneficial interest held by the UBO
Trustees must also hold beneficial ownership details regarding the trusts for which they are trustees. In addition to the above information, the following details are required:
- Name of settlor
- Name of trustee(s)
- Name of protector (if applicable)
- Name of beneficiary or beneficiaries
- All other natural persons who have control of the trust
Access to the Central Register (CRBO)
The information on the register of beneficial ownership is accessible by:
- National competent authorities with designated responsibilities for investigating and combating money laundering and terrorist financing.
- The Financial Intelligence Analysis Unit
- National Tax Authorities
In addition, any person or organisation who can satisfactorily demonstrate and justify a legitimate interest shall, in accordance with data protection requirements, be able to access the information provided by the UBO. The person or organisation must demonstrate that interest specifically and solely relates to or will contribute to the prevention, detection and combating of money laundering or the financing of terrorism.
Implementation in Malta
Malta is one of the countries which recently implemented the 4th AMLD on 1st January 2018. This requires entities in Malta to submit a declaration of beneficial ownership to the Malta Registrar of Companies. This information is entered onto a Register and kept by the Malta Financial Services Authority (MFSA), which is then interconnected with the Central Register of Beneficial Ownership, accessible by EU member states.
If you would like further information regarding this topic, please speak to your usual Dixcart adviser or contact firstname.lastname@example.org.