2019 was unquestionably the year when Ireland entered a new phase of transparency, writes Claire Lord.
Companies
Front and centre in 2019 was the launch of the Central Register of Beneficial Ownership of Companies and Industrial & Provident Societies, which opened for filings on 29 July. The first filing deadline of 22 November 2019 applied to companies and industrial and provident societies that had been incorporated on or before 22 June 2019. By this deadline, these companies and societies had to file information on their beneficial owners to the central register.
Now, every company and industrial and provident society registered in Ireland must file information on their beneficial owners to the central register within five months of becoming incorporated.
A beneficial owner is a natural person who ultimately owns or controls the share capital or the voting rights, or has control by any other means. The relevant legislation states that a holding (direct or indirect) of 25% plus one share will be indicative of ownership and control.
The information required to be filed to the central register includes name, date of birth, nationality, residential address and PPS number.
While companies and societies will be required to submit these details to the central register, the only information available to the public will be a beneficial owner’s name, country of residence, nationality, month and year of birth and nature and extent of ownership and control.
Individuals acting on behalf of An Garda Síochána, the Financial Intelligence Unit, the Criminal Assets Bureau, the Revenue Commissioners and other competent authorities will be entitled to access all information submitted to the central register, save for PPS numbers.
Trusts
Last year, Ireland also transposed into law the requirements under the Fourth Anti-Money Laundering Directive, as amended by the Fifth Anti-Money Laundering Directive (5MLD), concerning the determination of the beneficial ownership of certain types of trusts. These requirements apply to express trusts whose trustees are resident in Ireland, or which are otherwise administered in Ireland.
These new requirements oblige trustees of these trusts to create and maintain internal registers of the beneficial ownership of those trusts.
A beneficial owner of a trust is a natural person who ultimately owns or controls the trust and/or the natural persons on whose behalf a transaction or activity is conducted. This includes, at least, all of the settlors, the trustees, the protectors (if any), the beneficiaries, or – where the beneficiaries have yet to be determined – the class of persons in whose main interest the trust is set-up or operates, and any other natural person exercising ultimate control over the trust through direct or indirect ownership or by other means.
The information required to be maintained on an internal register of the beneficial ownership of a trust includes the name, date of birth, nationality and residential address of each beneficial owner.
In addition to obtaining and holding this information, trustees are obliged, on request, to provide the Revenue Commissioners and other competent authorities with access to their internal register.
Ireland is required to set-up a central register of beneficial ownership of trusts by 10 March 2020.
Partnerships
In late 2019, we saw the introduction of regulations that extend the requirement to file financial statements in the Companies Registration Office (CRO) to additional types of partnership. These regulations took effect on 1 January 2020.
Before these new regulations took effect, the partnerships that were required to file financial statements in the CRO were partnerships where all of the partners who did not have a limit on their liability were limited companies or their overseas equivalents.
The new regulations now require partnerships to file financial statements in the CRO where they are partnerships whose ultimate beneficial owners enjoy the protection of limited liability, including in circumstances where a partner is an unlimited company whose ultimate beneficial owners enjoy the protection of limited liability.
Conclusion
Much progress was made by legislators during 2019 to bring Ireland in line with the transparency requirements of the EU. While additional compliance requirements can place an initial burden on businesses, regardless of how those businesses are structured, normalising transparency of ownership and ensuring consistent public reporting of financial performance can only strengthen trading and the policing of money laundering.
Claire Lord is a Corporate Partner and Head of Governance and Compliance at Mason Hayes & Curran.