Who will have access to the UBO registry soon restored?

Like us wrote, public access to the register of UBOs (Ultimate Beneficial Owners of Companies) in November 2022 was temporarily closed. The reason was the decision of the European Court. Finance Minister Sigrid Kaag promised to study the issue and determine the circle of subjects who will restore access to the registry. By January 20, 2023, the Minister has prepared and presented Parliament an action plan to provide restricted access to the UBO registry.

EU directives AMLD4 and AMLD5

In matters of combating money laundering and preventing the financing of terrorism, the Netherlands is guided by a series of EU directives - Anti-Money Laundering Directive (AMLD). In the fourth directive (AMLD4) This is an obligation for EU Member States to maintain UBO registers, which can be accessed by:

1. competent authorities and financial intelligence units (FIUs);
2. reporting institutions that are required to carry out customer due diligence under the AML (Wwft institutions - Wwft-instellingen);
3. persons and organizations that can prove a legitimate interest.

However, according to fifth directive (AMLD5), the right of access to information in the registers of ultimate beneficiaries was given to everyone.

Position of the European Court

November 22 2022 years The European Court of Justice has given a preliminary ruling in the Luxembourg UBO registry case. The court considered the public opening of the UBO registry unreasonable. The ruling of the European Court caused a chain reaction in the EU states, in particular, public access to the UBO register in the Netherlands was closed.

5 декабря 2022 года The court published a review with clarifications. The Court considers that Member States should ensure that information on ultimate beneficiaries is made available to individuals and entities with a legitimate interest, and not to anyone else. That is, in fact, we are talking about a return to the provisions of the AMLD4 directive. Accordingly, there is a need to amend Dutch national law, in particular to section 21 of the Trade Register Act 2007 (Handelsregisterwet 2007).

Three groups of entities that will have access to the UBO registry restored

In his letter to Parliament on January 20, 2023, Minister Kaag describes the specifics of granting access to the register for three groups of subjects.

First group. Competent authorities

The Bureau of Economic Law Enforcement (Bureau Economische Handhaving - BEH), the Financial Crime Investigation Service (Fiscale Inlichtingen- en Opsporingsdienst - FIOD) and the Public Prosecutor's Office (Openbaar Ministerie) will have unconditional access to the register.

Second group. Institutions (wwft-instellingen)

This includes all institutionswho are required to carry out customer due diligence under the Money Laundering and Terrorist Financing Prevention Act (Wet ter voorkoming van witwassen en financieren van terrorisme—Wwft). The UBO registry is an important tool for this verification. At the same time, the decision of the European Court does not apply to Wwft institutions, therefore, access will be restored for them as soon as it is technically possible.

However, the list of Wwft institutions is very large. The technical conditions under which these institutions access the UBO registry vary. In particular, many Wwft institutions are not directly associated with the UBO registry, but through information technology service providers, and these providers have no legitimate interest in accessing the registry. As a result, technically setting up access to the UBO registry for all Wwft institutions is difficult, it will take time.

The easiest way in this group will be to provide access to the registry for banks: they are relatively easy to identify and connect. It is expected that for banks in this group, access will be restored the fastest.

Third group. Individuals and organizations with a legitimate interest

The minister is still studying the possibility of giving access to the UBO registry for this group. A list of objective indicators is being formed, according to which it is possible to assess the existence of a legitimate interest: it is possible that in some cases it will be necessary to conduct an individual assessment.

For example, representatives of the media (for investigative journalism) and public organizations involved in the prevention and fight against money laundering may have a legitimate interest in gaining access to the registry. Also, counterparties have a legitimate interest in obtaining information about the ultimate beneficiaries before concluding transactions.

Obligations related to the UBO registry

As long as the UBO registry is closed, the obligation of Wwft institutions to screen customers upon entering into a business relationship and report discrepancies to the competent authorities is irrelevant.

Rђ RІRѕS, the obligation to register legal entities in the UBO register has not been canceled. We remind you that from February, companies that are not registered in the UBO registry will be subject to sanctions. The same applies to the register of ultimate beneficiaries trusts and other similar structures.

Minister Kaag told Parliament that a bill would soon be drafted to ensure limited access to the UBO Register of Legal Entities and the UBO Register of Trusts.