September 30, 2019 is the new deadline by which Belgian organisations have to register their Ultimate Beneficial Owners (UBOs). This is the second extension of the deadline, which had originally been set for 20 November 2018 and then already extended once to 31 March 2019.
The requirements are imposed by Belgium’s Anti-Money Laundering Act of 18th September 2017, which in turn were put in place to meet the requirements of the EU’s Fourth Money Laundering Directive which aims to combat money-laundering and terrorism.
Belgium has put in place its Register of Ultimate Beneficial Owners which requires all companies and foundations to list information about the people who run organisations that are legally registered in the country.
The law makes up part of a global anti-terrorism fight, by making it more difficult to finance terrorist operations through anonymous flows of money impossible – or, at the very least, extremely difficult.
What is the UBO Register?
Scandals like the Panama Papers and the terrorist attacks in Paris, Brussels and elsewhere have highlighted a need for robust customer due diligence, and have pushed governing bodies to offer more transparency amongst entities. The EU’s anti-money-laundering Directives aim to respond to the lessons learned from such incidents, as well as incorporate the incredible leaps in technological innovation over the past few years.
Among other things, the Directive aims to:
- Encourage companies to catch up with new technologies
- Improve enforcement
- Clarify Politically-Exposed Persons (PEPs)
- Increase the transparency of beneficial ownership of corporates
- Report beneficial ownership of trusts
The UBO register falls under the final two points that the Directive aims to achieve.
Who Counts as a Beeficial Owner?
Beneficial owners of companies include:
- The people who directly or indirectly own a portioned percentage of voting rights or ownership interest in a company (this includes bearer shareholdings) of 25% plus one share (in the case of direct ownership), or more than 25% (in the case of indirect ownership).
- The people who control the company in other ways, such as via a shareholders’ agreement, the power to appoint management staff, or a veto
- If UBOs in those two categories do not exist, then the people who hold senior management positions and have full decision-making power are considered equivalent to UBOs for the purpose.
Beneficial owners of a(i)sbl and foundations include
- The people who are allowed to represent the foundation or a(i)sbl
- The people in charge of daily management
- The people who founded the organisation
- People in whose interest the organisation was set up or operates
- Any other people who are entitled to control over the a(i)sbl or foundation by other means
What You Need to Do
It’s up to the information providers and their directors to file the relevant information with the General Treasury Administration (who are in charge of the UBO register), not the UBOs themselves.
There are three key things you need to do to register and maintain your UBO listings and adhere to the legislation:
- You have an obligation to maintain the required information on your organisation’s listing
- You have an obligation to update your entry in the national UBO register within a month of any change to this information
- You have an obligation to confirm or update the information in the national UBO register once per year, regardless of whether it has changed or not
The data can be uploaded to the register via an online platform here.
What Happens When You’re on the UBO Register?
The new laws around the UBO register can be tough to get your head around. First of all you have to think about whether your business qualifies, then move on to pinpointing those key beneficial owners, and then start gathering the data you need and submitting it to the Treasury.
But, once you’re on the register, it’s pretty plain sailing.
When the information providers supply the Treasury with the required data, they also need to provide some information to the beneficial owners, too, in order to comply with data protection and privacy laws.
The General Treasury Administration will also let the beneficial owners know of their registration and send them all of the data recorded under their name every year. Information can be accessed at any time by the beneficial owners, and it can be updated or modified to align with any changes.
Each consultation of the register will be recorded and stored for ten years, even if a company no longer exists.
The main purpose of the UBO register is to provide transparency to businesses. As a result, companies, nonprofits, foundations, and legal entities are easily able to access the register. If the general public want to access it, they have to file a request with the Treasury Administration and clearly demonstrate a legitimate interest in the register, which includes the fight against money laundering, underlying criminal offences, or terrorism financing.
How to Get Started
It’s important that you get your entity registered as soon as possible, something that might have you scratching your head right now.
However, you can prepare by:
- Putting internal procedures in place to ensure you can quickly and easily collect relevant information from the beneficial owners (and put in place a communication channel for any related changes that might crop up further down the line)
- Identifying who exactly your beneficial owners are and collecting any documents that confirm their status, whether that’s an register of shareholders, an authentic deed, or a copy of the identity card
- Finding a legal or authorised representative with an E-ID card who you can put in charge of filing all the relevant information via the online platform (authorised representatives include internal agents as well as an external accountant or legal advisor)
Once all the information has been initially collected and filed, you then have an obligation to maintain the required information on your company’s listing, to update your entry within a month if there’s any change to this information, and to confirm or update your information once per year, regardless of whether it’s changed or not.
How Organisations Are Managing Their UBO Information
How an organisation manages their UBO information and filing depends on the company size and how readily available the relevant information is.
Some organisations have dedicated teams that are compiling all the information, collating it, and storing it online. Larger companies are building workflows in-house to monitor processes and make sure all information is filed correctly and updated when needed.
Because information and data needs to be extracted from many different sources throughout the business, it can be difficult trying to create a system that’s streamlined and efficient, which is why it’s important to start planning ahead and seeking out a system that works best for your organisation.
With the business landscape set to change forever in an attempt to provide more transparency, the UBO register is a step in the right direction. Filing all the relevant information needs to be at the top of your to-do list, with a secondary task of creating a process to manage the information following close behind.