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WRITTEN BY
Nicolas Dupont and Charlotte Peeters

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The arrival of the UBO register or the "register of wealth" - what you need to know

18/09/2019

The Anti-Money Laundering Act of 18 September 2017 (hereafter the “Belgian AML Act”), which transposes the fourth European Anti-Money Laundering Directive, has put in place the Register of Ultimate Beneficial Owners (“Registre des bénéficiaires effectifs/Register van uiteindelijke begunstigden”), i.e. a central register listing information about the natural persons behind Belgian companies and other legal entities (hereafter the “UBO register”).

The UBO-register is an extra measure in the fight against money laundering and terrorist financing. The purpose of this register is to bring more transparency to Belgian legal entities’ shareholdings by facilitating legally-designated persons’ access to information about these entities’ ultimate beneficial owner(s) (hereafter the “UBO(s)”).

The Belgian AML Act sets out the general rules and principles governing this UBO-register. The Belgian AML Act delegates the power to determine the UBO register’s operating procedures to the King. The Royal Decree on the UBO register’s operating procedures was published in the Belgian State Gazette on 14 August 2018 and entered into force on 31 October 2018.

A. Which legal entities are required to disclose their UBOs?

In addition to Belgian companies, (international) non-profit associations, foundations, trusts, fiduciaries and similar entities are the legal persons that are required to disclose their UBOs under the Belgian AML Act.  

However, companies listed on a regulated market which are subject to disclosure requirements compatible with EU law or equivalent international standards, and which guarantee adequate transparency of proprietary information, are not required to register their UBOs. The same applies to their (direct or indirect) 100% Belgian subsidiaries. Contrary to listed companies, such 100% subsidiaries must, however, still register with the UBO register in order to provide the group structure evidencing that they are indeed a 100% subsidiary of a listed company. These exemptions are based on administrative guidelines.

B. Who is an UBO?

The Belgian AML Act includes a general definition of the concept of an UBO. It is defined as the natural person(s) who ultimately own(s) or control(s) an entity (Article 4, 27° of the Belgian AML Act). The same provision provides more guidance about the natural person(s) to be considered as the UBO(s) of each relevant legal entity.

For companies, the following natural persons will be considered as UBOs:

  1. the natural person(s) who directly or indirectly hold(s) a sufficient percentage of the voting rights or of the ownership interest in the company (with holding directly or indirectly, through the holding of one or more companies, an interest of more than 25% of the voting rights or more than 25% of the company’s shares or capital being considered as an indication of a sufficient percentage of the voting rights or of the ownership interest).
  2. the natural person(s) controlling the company by other means (for example: a shareholders’ agreement, the power to appoint members of the board of directors, veto right(s)).
  3. the natural person or persons belonging to the senior management, if, after all possible means have been exhausted and there are no grounds for suspicion, no UBO is identified on the basis of 1) or 2) above, or if there is any doubt about whether the identified person or persons are the beneficial owner(s).

Regarding fiduciaries, trusts and similar entities, the ultimate beneficial owners are (i) the settlor, (ii) the fiduciaries or the trustees, (iii) the protector, (iv) the beneficiaries or, when the individuals benefiting from the fiduciary or trust have yet to be determined, the category of individuals in whose interest the legal arrangement or entity is set up or operates, (v) any other individual exercising ultimate control over the fiduciary or trust by means of direct or indirect ownership or by any other means.

Regarding (international) non-profit associations and foundations, the UBOs are (i) the directors, (ii) the persons authorised to represent the association, (iii) the day-to-day managers, (iv) the founders, (v) the natural persons or, when these persons are yet to be determined, the categories of natural persons for whose benefit the association/foundation is set up or operates or (vi) any other natural person exercising ultimate control over the association/foundation by any other means.

C. Who must transmit the information to the UBO-register?

The transmission of the information to the UBO-register is the responsibility of the legal person itself (through its director(s) or a mandated party) and not that of the UBOs. The directors must transmit the information to the UBO-register at the latest by 30 September 2019. Following this first registration in the UBO register, the directors must confirm the accuracy of the information in the UBO register once a year. They must update the register within one month each time the composition or the details of the UBOs change.

What happens if the directors fail to meet this obligation? They risk being held personally liable and can be fined with penalties ranging from EUR 50 to EUR 5,000. In addition, and depending upon the severity of the non-compliance, the directors also risk an administrative penalty ranging from EUR 250 to EUR 50,000.

D. What information must be disclosed?

The Royal Decree of 14 August 2018 sets forth which information the different Belgian entities must disclose on their UBOs. Below you can find an overview of the information that Belgian companies must disclose:

  1. Last name;
  2. First name;
  3. Day of birth;
  4. Month of birth;
  5. Year of birth;
  6. Nationality;
  7. Country of residence;
  8. Full address;
  9. The day on which he/she became an UBO;
  10. National number (or equivalent);
  11. To which category of UBO he/she belongs (see the different categories stated under “Who is an UBO?” above);
  12. Whether the UBO fulfills the thresholds of the different categories by himself/herself or together with another person. For example, when a shareholder owns 10% of a company’s shares but, on the basis of a shareholders' agreement, forms a group with other shareholders who together hold more than 25% of the company’s shares;
  13. Whether he/she is a direct UBO or an indirect UBO;
  14. If the UBO is an indirect UBO, the number of intermediaries and, for each of them, full identification details (name, date of incorporation, trade name, legal form, address of the registered office and company number);
  15. The significance of the interest in the company, which is:
    - in the case of a direct UBO and when control results from ownership of the shares or voting rights in the company, the proportion of the shares or voting rights in the company;
    - in the case of an indirect UBO and when control results from the indirect ownership of the shares or voting rights in the company, the weighted percentages of the shares or voting rights in the company.

E.  Who has access to the UBO register?

The information in the UBO-register is accessible for:

  1. The competent authorities (the Ministry of Finance, tax authorities, etc.);
  2. Entities subject to particular vigilance towards clients (notaries, banks, external accountants, lawyers, etc.); and
  3. Each citizen, but limited to the information stated under numbers 1, 4-7, 9 and 11-15. Furthermore, citizens can only request information by filing an application form with the company’s name and number. This means that they cannot simply obtain all the information on each large shareholding that a certain individual might have in different companies.

The UBO can request that access to the information is restricted to certain persons. However, such a restriction will only be granted in exceptional circumstances. The UBO must demonstrate that access would expose him/her to a disproportionate risk, such as the risk of kidnapping, extortion or harassment.

Should you have any questions or would you like further information, please contact our corporate and finance team.

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