On 17 April 2024, the Minister of Finance informed the House of Representatives by letter on developments around the UBO. In this article, we will briefly discuss the letter.
Since 2018, a natural person qualifies as a UBO if that person owns or controls more than 25% of the ownership or control. So, exactly 25% ownership does not lead to being a UBO now.
In the package of European legislative proposals in the field of prevention of money laundering and terrorist financing1, this changes and a natural person qualifies as a UBO at 25% or more of ownership or control. In other words, under the new proposal, exactly 25% of ownership or control therefore does lead to being UBO. The Minister of Finance warns that a number of legal entities are expected to have to review their registration in the UBO register2.
On 22 November 2022, the Court of Justice of the European Union ruled that public access to the UBO register constitutes a serious interference with the right to respect for private life and the right to protection of personal data. On the same day, a letter3 went out from the Minister of Finance saying that the Chamber of Commerce will not provide information from the register until further decisions are taken.
Following the ECJ ruling, the original provision in the AMLD4 has been revised and a legitimate interest must now be shown for individuals or organisations to gain access to that UBO register.4 There will still be a new, uniform process around the interpretation of the term ‘legitimate interest’. Either way, no legitimate interest means not being allowed to receive information from the UBO register.
Following the ECJ’s ruling, the original provision in the AMLD4 has been revised and a legitimate interest must now be shown for individuals or organisations to access that UBO register.A new, uniform approach around the interpretation of the term ‘legitimate interest’ is still to come. Either way, no legitimate interest means not being allowed to receive information from the UBO register.
As a work-around, financial institutions asked the customer to submit confirmation of registration in the UBO register. With this, the UBO register could still be checked and a separate UBO declaration was then no longer needed.
This work-around will soon be unnecessary. From 1 June 2024, a Wwft institution can request a certified extract of registration in the UBO register from its client, provided there is a legitimate interest on the part of the Wwft institution. The client can request this extract itself from the UBO register. Requesting a copy of registration in the UBO register is no longer sufficient.5
Because of the closure of the UBO register on 22 November 2022, the feedback obligation was then also suspended until further notice.6
In his letter, the Minister states that as long as a Wwft institution is unable to consult the UBO register, and therefore cannot detect any discrepancies, that institution is also unable to submit reports. Furthermore, the Minister indicates that once a Wwft institution regains access to information from the UBO register, the reporting obligation will once again apply. It is unclear whether obtaining an extract from the UBO register means that the Wwft institution has access to information from the UBO register and that the reporting obligation is thereby reinstated.
Interestingly, with the return of the feedback requirement, measures will also be taken to prevent the many unusable feedbacks. Indeed, of all the return notifications made up to the date of suspension, 81% did not lead to changes in the UBO register.
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