What is a Beneficial Owner & Other Information
1. AMLD
The European Union has legislated for a number of Anti-Money Laundering Directives (“AMLD”) also known as the Anti-Money Laundering and Counter Terrorism Financing Directives.
AMLD consists of a number of EU Directives on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing the most recent of which are
- EU Directive 2015/849, the 4th Anti-Money Laundering Directive (“4AMLD”);
- EU Directive 2018/843, the 5th Anti-Money Laundering Directive (“5AMLD”) which amends 4AMLD, was adopted by the Council of the EU on 14 May 2018 and came into force on 9 July 2018 with an 18-month transposition period meaning that it must be implemented by 10 January 2020, and
- EU Directive 2018/1673, the 6th Anti-Money Laundering Directive (“6AMLD”) comes into effect for member states on 3 December 2020 and must be implemented by financial institutions by 3 June 2021.
2. The purpose of the central register of beneficial ownership of companies and industrial and provident societies (RBO)?
The purpose of the central register of beneficial ownership of companies and industrial and provident societies (RBO) is to improve corporate trust and transparency in Ireland and the EU by making it clear to law enforcement agencies, regulatory authorities, designated persons, businesses and the general public who ultimately owns and controls Irish companies and industrial and provident societies (I&Ps).
The aim of the Directives is to deter money laundering and terrorist financing and to help law enforcement and regulatory authorities to identify those ‘natural persons’ who hide their ownership or control of Irish companies/societies for the purpose of facilitating illegal activities.
3. Registering a Beneficial Owner
The Directive and Regulations 5(2) of SI 110/2019 states that “all reasonable steps” should be taken to establish who the natural person Beneficial Owner is.
The steps involved include
- giving notice under Regulations 6 & 7 of SI 110/2019 to any natural person(s) the company/society or its presenter has reasonable cause to believe to be a beneficial owner. Once issued, the natural person(s) to whom this notice has been issued has one month to provide the necessary details; or
- giving notice under Regulations 8 & 9 of SI 110/2019 to any person(s) the company/society or its presenter has reasonable cause to believe to have knowledge of the set out in Regulation 9. Once issued, the person(s) to whom this notice has been issued has one month to provide the necessary details.
Failure by the natural person to reply and cooperate with the company/society or to make a false statement is a criminal offence.
Where all possible means to identify the beneficial owners have been exhausted unsuccessfully, the Regulations provide that the Senior Managing Officials (e.g., the Director(s) or CEO) shall be deemed to be the beneficial owners. Relevant entities shall keep records of the actions taken to identify their beneficial owners (Reg 5(5), SI 110/2019).
4. Defining who is a Beneficial Owner
A Beneficial Owner is defined in Article 3(6), 4AMLD, as any natural person(s) who ultimately owns or controls a legal entity, either through direct or indirect ownership of a sufficient percentage of the shares or voting rights or ownership interest in the entity, including through bearer shareholdings, or through control via other means.
These include:
- ownership (directly or indirectly) of more than 25% of the company/society’s shares,
- controlling (directly or indirectly) more than 25% of the company/society’s voting rights,
- control via other means which is explained in Recital 13 of 4AMLD as follows:
“Control through other means may, inter alia, include the criteria of control used for the purpose of preparing consolidated financial statements, such as
- through a shareholders' agreement,
- the exercise of dominant influence or
- the power to appoint senior management”.
If a relevant entity is a subsidiary owned by another corporate entity, any natural person(s) who holds or controls a shareholding of 25% plus one share, or an ownership interest of more than 25% in the parent corporate entity, is a beneficial owner(s) of the subsidiary.
If a relevant entity is a subsidiary owned by multiple corporate entities, Article 3(6), 4AMLD, states that a shareholding of 25% plus one share or an ownership interest of more than 25% in a subsidiary held by multiple corporate entities which are under the control of the same natural person(s), shall be an indication of indirect beneficial ownership.
Ultimately, it is a natural person(s) who must be identified and entered on the RBO as the beneficial owner(s) of the relevant entity, irrespective of how many layers of ownership there are in the company/society’s structure. The name of another company/society cannot be entered on the RBO.
If, after having exhausted all possible means and provided there are no grounds for suspicion, no natural person is identified as a beneficial owner, or if there is any doubt that the person(s) identified are the beneficial owner(s), the natural person(s) who hold the position of senior managing official(s) shall be recorded on the RBO as the beneficial owner. (Regulation 5(4) SI 110/2019). Relevant entities shall keep records of the actions taken to identify their beneficial owners (Regulation 5(5), SI 110/2019)
If in doubt, a company/society should seek legal advice to assist it in establishing who its beneficial owners are.
5. Beneficial Ownership Registration Requirements
Beneficial ownership information can only be entered online through a portal on the RBO website at www.rbo.gov.ie. There are no forms involved in filing data with the RBO and no filing fees.
The RBO Portal is similar to CRO’s CORE system and a user ID and password is required to login. This can be set up at the time of registering beneficial ownerships.
6. PPSNS
PPSN is Personal Public Service Number and is a unique reference number issued by the Department of Social Protection (DSP) to all Irish residents for dealings with DSP and certain other “prescribed” public service organisations.
PPSN’s are also issued to non-resident persons who have dealings with certain “prescribed” Irish Government organisations, including the Revenue Commissioners.
7. Fees
There is no filing fee for registering a Beneficial Owner, it is free of charge.
8. Time Frames
The Regulations requiring companies/societies to hold adequate, accurate and current information in their own internal register, Statutory Instrument 560/2016, came into effect on 15 November 2016.
This SI was revoked and replaced by Statutory Instrument 110/2019 on 22 March 2019.
The Regulations in relation to the central RBO Register, SI 110/2019, came into effect three months after the commencement of the Statutory Instrument, on the 22nd June 2019
Companies/societies were given five months in which to file their Beneficial Ownership details with the RBO.
Any company/society who did not file on or before the 22nd November 2019, are in breach of the Regulations and may be subject to sanctions as prescribed in the Regulations.
Regulation 20(2) requires all newly incorporated companies and I&P’s to register their beneficial ownership details within five months of incorporation.
Regulation 25(5) of SI 110/2019 allows for the beneficial ownership details to be exempt from access by designated persons and the general public where the beneficial owner is a minor. The beneficial ownership details of minors will be automatically withheld from public access until they reach the age of 18.
9. Exemptions
Regulation 25(5) of SI 110/2019 allows for the beneficial ownership details to be exempt from access by designated persons and the general public where the beneficial owner is a minor. The beneficial ownership details of minors will be automatically withheld from public access until they reach the age of 18.
10. Using the RBO Register Portal – how to log-in, create an account and file a submission
The RBO Register can be accessed using the Login / Register option at the top of the website
You will need to create a new account.
A video on “How To” create an RBO account is available here: How to Create An RBO User Account
11. Beneficial Owners who do not have a PPSN
If you do not have an Irish PPSN, then you must apply for an RBO Number, by means of a Form VIF - Declaration as to Verification of Identity.
Only one VIF form is required in respect of each beneficial owner and once this has been processed successfully and an VIF Number issued by the Registrar, that RBO Number can be used for making future beneficial ownership filings for that person.
More information is available on the CRO's website including the form VIF by clicking Here
Any relevant entity that fails to file a PPSN with the VIF where such a number has been assigned to a beneficial owner, will have committed an offence and attention is drawn to Regulations 28(5) and 28(7) of S1 110/2019 in this regard:
28(5): A person who, in purported compliance with Regulation 20, 21, 22 or 23, makes a statement that is false in a material particular, knowing it to be so false or being reckless as to whether it is so false, commits an offence and shall be liable -
- on summary conviction, to a class A fine or imprisonment for a term not exceeding 12 months or both, or
- on conviction on indictment, to a fine not exceeding €500,000 or imprisonment for a term not exceeding 12 months or both.
28(7):Where an offence under these Regulations is committed by a body corporate and is proved to have been so committed with the consent or connivance of any person, being a director, manager, secretary or other officer of the body corporate, or a person who was purporting to act in such capacity, that person shall, as well as the body corporate, be guilty of an offence and shall be liable to be proceeded against and punished as if he or she were guilty of the first-mentioned offence.
12. Reasons for RBO Beneficial Owners submission Rejection
The RBO Register is designed to accept and register submissions when all details entered are correct.
Under Data Protection regulations, the RBO does not have access to the personal details entered by the presenter.
Personal details are verified against Department of Social Protection (DSP). They are not verified with the Revenue Commissioners.
The common reasons for a submission rejecting are:
- PPSN and/or Date of Birth is incorrect
- Entering the DOB incorrectly onto the RBO Portal
- Mismatch on name
- Using maiden name instead of married name and vice versa
- Using middle name in everyday usage, but not matching with forename as registered with DSP (Paul Smith vs Michael Paul Smith)
- Using shortened versions of a name (Des/Desmond, Eddie/Edward)
- Using variations of a name (Bridget/Breege, Ted/Edward)
- Using Irish version of a name, when English version is registered with DSP (Eibhlínn/Eileen)
- Using English version of a name, when Irish version is registered with DSP (Eileen/Eibhlínn)
- Mix-up on entering details for multiple beneficial owners
If the data subject’s details do not match or need to be amended, please see section 12.2 below of this FAQ.
13. Discrepancies & Non-Compliance Notices
In the RBO regulations (SI 110 of 2019), a “discrepancy” has a specific meaning given to it and it depends on who is reporting the ‘discrepancy’.
SI 110/2019 only provides for discrepancies to be reported to the Registrar of Beneficial Ownership by a ‘designated person’ or a ‘competent authority/relevant person’.
In the case of a ‘designated person’, Regulation 20(3)(b) states that if a designated person carrying out customer due diligence on an entity, or otherwise, forms the opinion that there is a discrepancy between the information in the central register (RBO) and the information the entity must hold in its internal register of beneficial ownership, then the designated person shall deliver, in a timely manner, to the Registrar… notice of that opinion, specifying the particulars as respects which the foregoing discrepancy exists.
The definition of a ‘designated person’ is provided in Section 25 of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, as amended, and includes credit institutions, financial institutions, auditors, external accountants, tax advisors, property service providers, casinos and any person trading in goods involving transactions totalling at least €10,000.
In the case of a ‘relevant person’, Regulation 26(1) states that if any relevant person forms the opinion that there is a discrepancy between the information relating to a relevant entity in the central register (RBO) and the beneficial ownership information available to the relevant person relating to the same entity, to the extent that it does not interfere unnecessarily with the performance of its functions, the relevant person shall deliver, in a timely manner, to the Registrar, notice of that opinion specifying the particulars of the discrepancy.
A ‘relevant person’ is a competent authority, the Garda Síochána, the Revenue Commissioners or the Criminal Assets Bureau.
14. What safeguards are in place to ensure the accuracy of information on the Register
The following safeguards are in place:
- The filing of beneficial ownership details can only be made via the RBO Online Portal – www.rbo.gov.ie - by a “Presenter” who has first registered as a user with the RBO.
- Every submission is recorded along with information about who made the submission (the Presenter) and with the capacity in which the Presenter is acting.
- In order to register, update or delete a beneficial owner, the Presenter must submit details including the beneficial owner’s Personal Public Service Number (PPSN), date of birth, name and address. The RBO validates these details by comparing them electronically with data held on the PPSN database of the Department of Social Protection (DSP).
- If the details entered in the RBO do not match with DSP’s records, the submission is rejected and the intended beneficial owner is sent a letter notifying them that someone has attempted to file their personal information with the RBO.
- Each relevant entity has a duty to ensure that the information entered in the RBO in respect of their company or society is accurate and current. The relevant entity has an obligation to amend the Register if the information on the Register is incorrect.
- The RBO is a public register. Therefore, relevant entities and their Presenters can easily check the RBO website – www.rbo.gov.ie - at any time to see who is recorded as a beneficial owner of their company or society.
- If it comes to the attention of a relevant entity that a person has been added improperly as a beneficial owner of their company or society, the relevant entity can report this to the Registrar of Beneficial Ownership at discrepancies@rbo.gov.ie and, if the entity has reason to believe that the filing has been made maliciously or with ill-intent, to the Garda Síochána (Irish Police).
- There is a multitude of state and non-state competent authorities and designated persons who are now legally obliged to inspect the RBO as part of their “customer due diligence”. These include, for example, accountants, auditors, solicitors, financial institutions and insurance undertakings.
- The competent authorities and designated persons are legally obliged to report to the Registrar any discrepancy they see between the details in the RBO and the beneficial ownership information that is available to them. FAQ Number 15 sets out how to file a Discrepancy Notice with the Registrar.
- Offences are prescribed in Statutory Instrument 110/2019 for filing false information, for failure of a relevant entity to file and maintain correct information on the Register and for failure of a designated person to report a discrepancy. The specific penalties for filing false information with the Register are as follows:
- on summary conviction, a Class A fine or imprisonment for up to 12 months or both;
- on indictment, a fine not exceeding €500,000 or imprisonment for up to 12 months or both.
15. Legal obligations of ‘designated persons’ to inspect RBO and report discrepancies and non-compliance
The meaning of the term ‘designated person’ is outlined in Section 25 of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, as amended, and includes financial institutions, accountants, auditors, tax advisers, legal professionals, property service providers, virtual currency service providers and dealers in expensive goods such as houses, cars, jewellery, art works, etc.
According to Section 33 of the 2010 Act, ‘designated persons’ are obliged to conduct customer due diligence tests on customers “prior to the establishment of a business relationship with a customer”, “prior to carrying out an occasional transaction with , for or on behalf of a customer” or “carrying out any service for the customer….…”
If in any doubt about their responsibilities under the Criminal Justice Acts, ‘designated persons’ should seek their own legal advice.