NEW OBLIGATION TO DISCLOSE UBOs
WHAT IS NEW?
Effective as of November 1, 2018, Slovakia’s transposition of the IV. AML Directive1 imposed a new obligation on legal persons – an obligation to register the details of its ultimate beneficial owner(s) in the Commercial Register. Existing companies must file details of their ultimate beneficial owner(s) with the Commercial Register by December 31, 2019.
In addition, legal persons must identify and internally maintain details of their ultimate beneficial owner(s) to provide evidence in the event of possible inspection and aligning with anti-money laundering and prevention of terrorism financing obligations.
WHO MUST REGISTER?
The new obligation concerns almost all legal persons, especially corporations. Exceptions apply only to subjects of public administration, issuers of securities which are publicly traded on registered security exchanges and subjects already registered in the Register of Public Sector Partners2.
Foundations, non-investment funds, and non-profit organizations providing generally beneficial services must register details of their ultimate beneficial owners with their respective registers.
IS THE REGISTER OF PUBLIC SECTOR PARTNERS INTEGRATED WITH THE COMMERCIAL REGISTER?
If a legal person is validly registered with the Register of Public Sector Partners, it does not have to register its ultimate beneficiary owner(s) in the Commercial Register. However, this does not apply both ways. If a legal person is obliged to register an ultimate beneficiary owner(s) in the Register of Public Sector Partners, it has to do so regardless of whether it has registered its ultimate beneficiary owner(s) in the Commercial Register.
WHO IS AN ULTIMATE BENEFICIAL OWNER?
An ultimate beneficial owner (“UBO”) is a physical person, who ultimately owns or controls the legal person. A physical person is particularly recognized as having ownership or control if he/she has the right to (i) profits (of at least 25% of the economic benefit), (ii) make decisions (consisting of at least 25% of voting rights), or (iii) appoint members of the legal person’s bodies. In addition, a person is also considered to have ownership or control of a legal person if he/she controls a legal person in another way e.g., indirectly (Sect. 66 of the Commercial Code) or who does not strictly meet any of the criteria above but practically does so through agreement with other parties. If no physical person can be identified based on these criteria, the statutory body, the authorized signatory, or a senior employee directly responsible to the statutory body, will be considered as the ultimate beneficial owner(s).
WILL INFORMATION BE PUBLICALLY AVAILABLE?
UBO details registered in the Commercial Register will not be publically available. Such details will only be available to so-called “obliged persons” pursuant to the Act on AML3. In addition, such information will be available to public bodies, such as the financial police, tax office, and courts.
WHAT TO DO?
Legal persons must identify its ultimate beneficial owner(s) and internally maintain actual records of his/her details in electronic or written form. Subsequently, the details of the ultimate beneficial owner(s) must be registered with the Commercial Register. The request to register the ultimate beneficial owner shall be filled by the legal person electronically or in paper form, does not need to be supplemented with any documents, and the registration is free of charge.
1. Directive (EU) No. 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC (the “IV. AML Directive”).
2. Register pursuant to the Section 3 et seq. of the Act No. 315/2013 Coll. on Register of Public Sector Partners and on amending and supplementing of certain laws, as amended (the “Register of Public Sector Partners”).
3. The Act No. 297/2008 Coll. on prevention of anti-money laundering and on prevention of terrorist financing and on amending and supplementing of certain laws, as amended (the “Act on AML”).
Banking & Finance
|This document is of a purely informative nature and cannot be construed as legal advice or legal analysis.|