New Belgian requirements for disclosure of beneficial ownership of legal entities – the "UBO Registry"

UBO Register: introduction and legal framework

In implementation of EU Directive 2015/849 (the 4th EU Anti-Money Laundering Directive) a centralized registry of Ultimate Beneficial Owners (“UBOs”) of Belgian legal entities has been established by the law of 18 September 2017 on the prevention of money laundering and terrorist financing and on restriction of the use of cash¹ (the “Law”) and by the Royal Decree of 30 July 2018 adopted thereunder² (the “Decree”).

Pursuant to the Law and the Decree, every company, not-for-profit entity, foundation, trust, fiduciary or other similar Belgian entity (the "Information Providers") is required to collect and hold adequate, accurate and up-to-date information relating to its UBOs. Such information must be filed with the UBO registry (the “Registry”) which is managed by the General Administration of the Treasury (the “FPS Finances”).

The Law and Decree entered into force on 31 October 2018. The deadline for filing the requisite information with respect to UBOs with the Registry is 30 September 2019.

The concept of Ultimate Beneficial Owner – UBO

The term UBO refers to an individual or individuals (Belgian or foreign, whether residing in Belgium or abroad) who, ultimately, own(s) or control(s) an Information Provider. Depending upon the situation an entity may have either a single UBO or multiple UBOs.

In cases where the Information Provider is a company, the UBO is any individual who:

1. ultimately own(s), directly or indirectly, a “sufficient percentage” of the voting rights or shares in the company [to exercise control over the company] it being understood that the direct or indirect (via a participation held by one or more intermediary companies) ownership of more than 25 percent of the voting rights or the share capital of the Information Provider is conclusively deemed to be a “sufficient percentage” ; or
   
   
2. control(s) the company by any other means (e.g. shareholders’ agreement, power to appoint the directors, veto rights, etc).
   

In case none of the aforementioned persons can be identified³ , the designated UBO(s) will be the physical person(s) who hold(s) the position of chief executive officer(s) of the Company.

Companies whose shares are listed on a regulated market in Belgium, in another EU country or in a non-EU country with listing obligations similar to those imposed by EU shareholding transparency rules are exempt from the obligation to identify their UBO. 

Information to be communicated

For each UBO, the company must communicate the following information:

• the UBO’s last name and first name;
• date of birth;
• nationality;
• residential address;
• date on which he/she became UBO;
• National Register number or registration number with the Crossroads Bank for Social Security (or similar identifier abroad);the relevant category of UBO to which he/she belongs;
• whether he/she fulfills the conditions for qualification as ultimate beneficial owner individually or together with other persons;
• whether he/she is a direct or indirect UBO (i.e. through the intermediary of one or more legal entities⁴);
• in the case of an indirect UBO: the complete identification of each intermediary; and the percentage of shares or voting rights directly owned in the company and, in the case of indirect ownership or control via one or more intermediaries, the weighted percentage of shares or voting rights held in the company.
  

All data must be uploaded to the Registry via an application available on the online platform “MyMinFin” of the Belgian Ministry of Finance.

It is recommended to submit pertinent supporting documents when filing with the Registry (e.g. copy of identity card / passport, corporate organigram, etc.) but the submission of such documents is not mandatory.

How the Registry works

1. How is information filed with the UBO Registry?

The company’s legal representative (i.e. director, manager, i.e. the person having the power to represent the company) is responsible for filing the information on behalf of the Information Provider.

The legal representative can connect to the MyMinfin platform with an electronic identity card (“eID”) or another secure authentication method approved by the FPS Finances (e.g. token, Itsme mobileapp).

If the legal representative cannot access the platform via any of these identification methods (for example, if the legal representative is a non-Belgian resident who does not have a Belgian electronic ID card and cannot use the Itsme application which requires having a personal bankcard issued in Belgium), he/she may either⁵ :

i. obtain a registration number from a local Belgian registration bureau (“bureau d’enregistrement”/”registratiekantoor”) with access code, username and password; or

ii. appoint an employee internally (who has a Belgian electronic ID card) as proxy holder who will then be able to file the necessary information on behalf of the company.

If neither of the foregoing options is practical, a manually signed power of attorney can also be granted to an external third party (e.g., an attorney, a certified public accountant, tax adviser, natural or legal person). A standard form of such power of attorney is available online. A PDF copy of the completed and signed form should be sent to mandats.ict@minfin.Fed.be. The mandated person will then be able to effectuate the registration with the UBO Registry as proxyholder of the legal representative of the Information Provider.

For example, a foreign-resident CEO of a Belgian company could use the paper form to grant a power of attorney to the company’s Belgian attorneys or accountants to make the requisite filing with the UBO Registry.

A user manual for the application has been published by the FPS Finances as well as a list of frequently asked questions (both available in French and Dutch).

The Information Provider and FPS Finances will inform the UBO of his/her registration and provide him/her with the information which has been filed with the UBO Registry. The UBO information (i.e. UBO’s name, date of birth, nationality and address, as well as the nature and extent of its beneficial interest) needs to be updated at least once a year. The Information Provider will receive annually an email from the FPS Finances inviting the Information Provider to confirm or update the existing UBO information.

The UBO has access to all information registered under his/her name. In case the UBO does not have a Belgian electronic ID card, a request for information may be filed with the FPS Finances and, as the case may be, a request for modification of any inaccurate data. Any modification in information filed with the UBO Registry must be communicated to the Registry by the Information Provider within one month as from the date of the change.

2. Who can access the UBO Registry?

The information in the UBO Registry is accessible not only to (i) the competent authorities responsible for combatting money laundering and the financing of terrorism (including tax authorities) and (ii) to entities (such as banks, lawyers, notaries and accountants) entrusted with an anti-money laundering due diligence obligation, if they demonstrate that access to the Registry is required in order to conduct such due diligence, but also to (iii) every « citizen », subject to payment of the related administrative cost. 

However, ordinary citizens are granted limited access to the Registry, i.e. they have no access to the first name, date of birth, full address of residence and national registry number or equivalent of the UBO. They must conduct their search via the company’s name or registration number. Searching by the name of a physical person is not possible.

The UBO may file a request to the FPS Finances to identify which authorities, organizations and persons have, during the last six months before the request was filed, consulted or updated their data in the Registry (with the exception of administrative and judicial authorities responsible for the investigation and the repression of offenses).

Each consultation of the Registry will be recorded and stored for a 10-year period. The data contained in the Registry are stored during the same 10-year period as from the day the company ceases to have legal personality or ceases its activities.

3. What are the UBO's rights?

In exceptional circumstances, the UBO (or its agent) may request, via the platform (in which case access to the information will be temporarily suspended) or by specific written request to the FPS Finances, to restrict access to part or all of his/her information. The UBO must demonstrate that “such access would expose him/her to a disproportionate risk or a risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation or where the beneficial owner is a minor or otherwise incapacitated” and present evidence to support such claim. The FPS Finances may grant a derogation on a case-by-case basis after “detailed analysis of the exceptional nature of the circumstances”.

4. What are the consequences of non-compliance?

In case of non-compliance with the obligations resulting from the Law, the Minister of Finance may impose an administrative fine amounting to between EUR 250 and EUR 50,000 on the directors/managers and, if applicable, on the members of the management committee and on any person who, in the absence of a management committee, participates in the effective management of the company.

The directors/managers of the company are also subject to a criminal fine of between EUR 400 and EUR 40,000.

Action required

In light of the forthcoming 30 September 2019 deadline for making the initial annual filing with the UBO Registry, any Belgian legal entity should take immediate steps to (i) identify its current UBO(s) for the purposes of the Law and Decree and (ii) either directly or via an external intermediary (cf., paragraph 1 above) arrange for filing of the requisite information (and any relevant supporting documents) with the UBO Registry. Dechert’s Brussels office can of course provide all required assistance in these respects, and for such purpose please feel free to contact either your normal Dechert Brussels attorney or any of the attorneys listed below.

Footnotes 

1) “Loi relative à la prévention du blanchiment de capitaux et du financement du terrorisme et à la limitation de l'utilisation des espèces”/ “Wet van 18 september 2017 tot voorkoming van het witwassen van geld en de financiering van terrorisme en tot beperking van het gebruik van contanten”, Belgian Official Gazette, 6 October 2017.

2)“Arrêté royal du 30 juillet 2018 relatif aux modalités de fonctionnement du registre UBO"/"Koninklijk besluit of 30 juli 2018 betreffende de werkingsmodaliteiten van het UBO-register", Belgian Official Gazette, 14 August 2018.

3) Which must be evidenced by the Information Provider.

4) Indirect control may result from either (i) a controlling interest (> 50 percent) in an intermediary that directly or indirectly owns more than 25 percent of the shares or voting rights of the Information Provider, or (ii) a weighted participation of the relevant person of more than 25 percent in the Information Provider through intermediaries.

5) Please refer to the detailed explanations here (available in French and Dutch).