The Fifth Directive of the European Union for the Prevention of Money Laundering and the Financing of Terrorism, of 30 May 2018, echoes the great concern over the recent attacks suffered (Paris, Nice, Berlin, Brussels, London, Barcelona and Cambrils), and is determined to toughen the surveillance measures, and one of them is to improve “the transparency of the companies and other legal entities, trusts (” trust “) and similar instruments”.
For this purpose, it establishes that Public Registries must have “sufficient, accurate and current” information on the beneficial ownership of the companies, and allow public access to this information.
It is reminded that the beneficial owner is “the individual or individuals who ultimately own or control, directly or indirectly, a percentage greater than 25% of the capital or voting rights of a legal entity or that, through agreements or statutory provisions, exercise a direct or indirect control of a corporation”.
If the beneficial owner is also a corporation, the beneficial owner of this corporation shall be consigned, and the chain will continue upwards until reaching the beneficial owners who hold control in more than 25%.
The Directive emphasizes the need for the “legally bound subjects” (the companies themselves -by means of their directors-, financial entities, public registries, notaries, lawyers that provide corporate or real estate advice, real estate agents, among others) to collect and safeguard these data, maintaining them in a “sufficient, accurate and current” way.
For years, this information has already been gathered by companies, affected professionals, financial institutions and notaries.
The novelty lies in the public access to the information contained in the registers, which the Directive concludes that “it allows for greater control of information by civil society, including the press or civil society organizations” since ” The confidence of investors and the public in financial markets depends to a large extent on the existence of a rigorous disclosure regime that provides transparency regarding real ownership and the control structures of companies “.
It is also a novelty that, if there is no real ownership, because the capital is in hand of partners with smaller shareholdings, the data of the directors of the final company will be consigned.
The scope of this publicity remains to be seen, and its collateral effects can be disconcerting (all the citizens to know who is the owner of half of the city, it is a collateral effect that does not have much to do with the fight against terrorism…).
We must remember, however, the misgivings that caused the first company Directives, back in the 70s, which forced to deposit the annual accounts of the companies in the Commercial Registry …
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Juan Núñez – lawyer