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Ireland beneficial ownership register rules now in force

Monday, 28 November, 2016

Ireland's Department of Finance has published new regulations requiring companies and other legal entities incorporated in Ireland to take 'all reasonable steps' to obtain full information on their beneficial owners. This new requirement came into force on15 November 2016.

Evidence of ownership or control

The regulations are derived from the current text of the EU's Fourth Anti-Money Laundering Directive (4AML). No exemptions or transitional periods are granted.

All affected bodies must now set up an internal register to hold information on beneficial owners, which are defined as 'an individual who ultimately owns or controls the relevant entity through direct or indirect ownership of a sufficient percentage of the shares or voting rights or ownership interest in the relevant entity'. A shareholding of 25 per cent plus one share, or an ownership interest of more than 25 per cent, will be evidence of ownership or control.

Where the beneficial owners are not known, the company's officers must try to obtain the information. If no beneficial owners can be identified, the names of the senior managers, directors and chief executive must be entered on the register as the beneficial owners. Individuals themselves are also obliged to notify entities in which they have a beneficial interest, if they have not already done so.

Penalties for failure to comply

Failure to comply with any of these obligations is a criminal offence punishable with a EUR5,000 fine.

Ultimately, Ireland will have to establish a central register of beneficial ownership as specified in 4AML. The regulations introduced this month merely transpose article 30(1) of the directive into Irish law.

The idea for doing this early is to give corporate entities time to gather the data they will need to submit to the central register when it comes into operation in June next year, say Adam Synnott and Deirdre Mooney of Dublin law firm William Fry.

Public registers?

There is as yet no obligation on Irish companies to make their internal registers public, though they will have to do so when 4AML comes into full effect.

Furthermore, the new regulations only apply to incorporated entities, and do not affect trust structures or limited partnerships. Some trust structures will become subject to beneficial ownership requirements, but these provisions of 4AML have not yet been transposed into Irish law.

Sources

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