Luxembourg Register of Beneficial Owners – An Update

In January 2019, we published a newsflash “Luxembourg Register of Beneficial Owners Has Arrived”¹ on the publication of a law² that established the Luxembourg Register of Beneficial Owners (Registre des Bénéficiaires Effectifs, or RBE), and that requires all entities that are registered with the Luxembourg trade and companies register (Registre de Commerce et des Sociétés, or RCS) – including investment funds – to disclose, and regularly update, information as to their beneficial owners. The law (referred to herein as the RBE Law) entered into force on 1 March 2019 and entities in scope had until 31 August 2019 to comply with the RBE Law and file the necessary information regarding their beneficial owners with the RBE.

The RBE law has been in force for just over four years, and the purpose of this publication is to provide an update on the state of play, as well as a recap of some of the key requirements and practical considerations.  

Who can access the RBE – developments since 2019

In our 2019 newsflash we noted that the RBE may be accessed not only by certain national authorities (including the public prosecutor, Financial Intelligence Unit, tax authorities and the CSSF) but also by the general public. 

However, a judgement of the Court of Justice of the European Union³ (ECJ) of 22 November 2022 ruled that the general public’s access to the information in the RBE (as provided for in Article 30(5)(c) of the 4th Money Laundering Directive⁴ where it states "that Member States must ensure that information on the beneficial ownership of companies incorporated within their territory is accessible in all cases to any member of the general public") was invalid. 

On the same day as the ECJ’s ruling and following a decision of the Luxembourg Ministry of Justice, the Luxembourg Business Registers (LBR) suspended all access to the RBE. As a consequence, the professionals subject to and listed at Article 2 of the amended law of 12 November 2004 on the fight against money laundering and terrorist financing (e.g., banks, financial sector professionals, notaries, lawyers) (Professionals) temporarily had their access to the RBE suspended.

To remedy this situation and to reopen access for Professionals, the LBR put in place a new procedure, set out in its Circular 22/01,⁵ to enable Professionals to again access the RBE. Pursuant to this new process, and before being able to access the RBE, a Professional needs (i) to be in possession of a digital ID product issued by Luxtrust SA (i.e., a certificate of verified digital identity) and (ii) to sign an agreement governing access to the RBE consultation and its technical appendix. This will lead to the creation of an account with the LBR, allowing the Professional to be identified as such by the LBR, when connecting to the website. The rationale for this procedure is to enable the RBE to monitor and identify any suspicious activity.

The Professional will then be able to view the RBE data and order RBE extracts. However, the LBR’s Circular 22/01 expressly states that consultation of the RBE by a Professional “should only be carried out within the framework of their obligations in terms of the fight against money laundering and terrorist financing”. Consequently, a Professional’s access is more restricted than before the ECJ’s ruling and such Professional’s reasons for accessing the data on the RBE are strictly limited. 

Keeping the information on the RBE up to date

Every entity⁶ in the scope of the RBE Law, is legally required to register with the RBE within one month from the time when the relevant entity became aware or should have become aware of the event which resulted in the entry into the RBE or, as the case may be, the necessary amendment to any information relating to the identity of the beneficial owner. Filing the requisite information with the RBE is a task for the entity – whether the board of the entity, the money laundering reporting officer (MLRO), or a service provider of the relevant entity entrusted with this function. The registration with and the updating (as mentioned hereafter) of the RBE are not undertaken by a notary or a law firm on the entity’s behalf. 

Ongoing obligation to keep the information on the RBE up to date

The information in the RBE must be kept up to date, meaning that if there is a change to any information on file at the RBE, the RBE must be updated within one month from the time when the registered entity became aware or should have become aware of the event which makes the amendment necessary. Examples of when a change may need to be notified include: 

• If there is a closing/transfer/withdrawal/change of control in an entity etc.
• Board of managers composition has changed.
• Name, registered address etc. of the entity has changed. 

Alignment of information on file with the RBE and RCS

While the RBE filings are separate from any RCS or CSSF/AED AML filings, it is important to note that the RBE Law requires all entities that are registered with RCS to disclose, and regularly update, information as to their beneficial owners. It is important that the information that is filed with the RBE and the RCS is consistent, and that the RBE and the RCS are updated at the same time. Note, checks are being undertaken to ensure that the information is consistent. 

Sanctions

Criminal fines of €1,250 to €1,250,000 can be imposed on entities or beneficial owners that do not comply with their obligations under the RBE Law.

For more information, please contact any of the individuals referenced below or your usual Dechert contact.

Footnotes

1) The OnPoint is available here. 

2) Luxembourg law dated 13 January 2019 establishing a register of beneficial owners. The RBE Law enacts the bill of law n°7217 dated 5 December 2017.

3) The ECJ’s judgement is available here.

4) Directive (EU) 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 and terrorist financing.

5) The LBR’s process is set out in Circular LBR 22/01, available here.

6) This encompasses companies and partnerships, whether or not regulated, including Luxembourg investment funds such as UCITS, Part II Funds, SIFs, SICARs, RAIFs and other types of AIFs.