The Royal Decree establishing the operating procedures for the Belgian UBO Register was published on 14 August 2018 and will enter into force on 31 October 2018. Companies, (international) non-profit organisations, foundations, trustees and fiduciary managers must submit the information about their ultimate beneficial owner(s) to the Register for the first time by 31 March 2019 at the latest.
Background
The Act of 18 September 2017 on the prevention of money laundering and terrorist financing and on restriction of the use of cash (Belgian Official Gazette, 6 October 2017) implemented the fourth European anti-money laundering directive (Directive 2015/849) in Belgian law and introduced the UBO Register into the Belgian landscape: a central register managed by a department within the General Administration of the Treasury (FPS Finance – https://finance.belgium.be/en/register-beneficial-owners) containing data on Belgian companies and other legal entities and their underlying natural persons. The Act already stipulates who should be considered as an ultimate beneficial owner ("UBO"). It further requires companies, associations and foundations to obtain and maintain adequate, accurate and up-to-date information about their ultimate beneficial owners and their directors in order to submit this information to the Register (see Eubelius Spotlights June 2017 and Eubelius Spotlights March 2018).
The details of how the Register would operate had not yet been established. The entire practical organisation of the Register – exactly what information needs to be collected, the way in which the information is collected, the management of and access to the information, the use of the data, etc. – had not yet been specified. This has now been done.
Here we provide an overview of the most important aspects of the functioning of the UBO Register, applied to Belgian companies. The rules for (international) non-profit organisations, foundations, trusts and fiduciaries and comparable legal entities are very similar, but differ in certain respects (e.g. the exact content of the information to be submitted and access to that information).
Information to be submitted to the Register
Belgian companies have a very extensive information obligation, for which the directors of the companies are responsible. For each ultimate beneficial owner, the directors of the company must provide the Register with the following information:
- name and surname;
- day, month and year of birth;
- nationality/nationalities;
- country of residence;
- full address;
- date on which he/she became ultimate beneficial owner;
- National Register number or identification number at the Crossroads Bank for Social Security and, where appropriate, any comparable means of identification issued by the State where he/she is staying or of which he/she is a national;
- the category/categories of ultimate beneficial owner to which he/she belongs;
- whether he/she fulfils the conditions for qualification as ultimate beneficial owner individually or together with other persons;
- whether he/she is a direct or an indirect ultimate beneficial owner;
- in the case of an indirect ultimate beneficial owner: the number of intermediaries, with full identification data; and
- the extent of the ultimate interest.
Information to be provided to the ultimate beneficial owner
Besides their information obligation to the Register, companies must also inform their ultimate beneficial owners, on a durable medium, about:
- their obligation to communicate the said data to the Register;
- the registration and storage of the information in the Register;
- the name and address of the service within the Administration of the Treasury responsible for managing the Register;
- the possibilities for access to the Register;
- the right of the ultimate beneficial owner to take cognisance of the data recorded in his/her name in the Register and to have it corrected or deleted if the data are incorrect; and
- the period for which the data will be stored.
Once all the information has been submitted to the Register, the Treasury Administration will inform the ultimate beneficial owner of the registration in the Register and will provide him/her with the information that has been recorded.
Consequences of non-compliance with the information obligation
There are three distinct types of infringement of the information obligation, each of which is subject to an administrative and/or criminal sanction:
- failure to collect and maintain the required information;
- failure to submit the information to the Register (in a timely manner); and
- submission of incomplete or incorrect information to the Register.
The Minister of Finance may impose an administrative fine of between EUR 250 and EUR 50,000 on the directors and, if applicable, on one or more members of the statutory board or of the management committee and on persons who, in the absence of a management committee, participate in the effective management of the company when they are responsible for one of these three infringements.
If the first or second infringement is determined, the directors of the company are also fined between EUR 50 and EUR 5,000 (ultimately equating to between EUR 400 and EUR 40,000 when multiplied by the coefficient for adapting criminal fines to current monetary values ("opdeciemen"/"décimes additionnels")).
Timing and form of the information submission
The Royal Decree establishing the operating procedures for the UBO Register enters into force on 31 October 2018. Under Belgian company law, however, companies have a period of one month to submit the data to the Register, counted from the moment the information is known or has been changed. The data must therefore be submitted to the Register for the first time by 31 March 2019 at the latest. Thereafter, companies must update the information at least annually. The information will be retained for 10 years from the date of the company's loss of legal personality or permanent cessation of activities.
The Royal Decree states that the Minister of Finance must further determine the technical arrangements for the transfer, registration and storage of the data. It is already known that the data will be transferred to the Register via the electronic platform MyMinfin, after logging in with an e ID.
Access to the information in the Register
The information in the UBO Register regarding the ultimate beneficial owners of Belgian companies will be accessible to:
- the competent authorities (including the tax authorities). They will have free access to all information about the ultimate beneficial owners and must appoint a staff member responsible for managing their access to the Register and for the confidentiality of the information obtained;
- entities which have obligations regarding vigilance towards their clients as imposed by the anti-money laundering legislation. These entities will get access to all information about the ultimate beneficial owners, subject to payment of the administrative cost (to be determined by the Minister of Finance). These entities must also appoint a staff member responsible for managing their access to the Register and for the confidentiality of the information obtained;
- every citizen will have access to the Register, subject to payment of the administrative cost (to be determined by the Minister of Finance), but only to a limited part of the information (the first name, day of birth, full address and National Register number or equivalent of the ultimate beneficial owner will not be publicly accessible).
The third category – "every citizen" – was introduced by the fifth European anti-money laundering directive (Directive 2018/843) to allow more research into this information by the press and civil society organisations, among others, with a view to preserving trust in the integrity of business transactions and the financial system. Citizens will only have access to the information through the company number or company name. Searching for a natural person by name will therefore not be possible. In addition – following the advice of the Data Protection Authority – each consultation of the register will be recorded and stored for a period of 10 years. However, consultation of the Register will always take place without the company or the beneficial owner being informed.
In exceptional circumstances, the ultimate beneficial owner will be able to ask the Administration of the Treasury to restrict access to his/her information in the Register in whole or in part. The ultimate beneficial owner must be able to demonstrate that the access exposes him/her to a disproportionate risk or a risk of fraud, abduction, blackmail, extortion, bullying, violence or intimidation. A restriction on access to the information can also be requested if the ultimate beneficial owner is a minor or is otherwise incapacitated,.
How should you get prepared?
Now that the main procedures for the operation of the UBO Register have been established, it is important to prepare for the entry into operation of the Register. To this end, every company can take the following steps:
- identify the category to which the ultimate beneficial owners belong;
- obtain and maintain accurate and detailed information on the ultimate beneficial owners and on all legal entities through which the beneficial owners control the company;
- collect supporting documentation establishing that the information is adequate, accurate and up-to-date;
- appoint a legal representative or a proxy with an e-ID who can submit the information via MyMinfin on behalf of the company;
- set up procedures within the company so that any change in the information about the ultimate beneficial owners is transferred to the UBO Register within a month.