Half of company applications for professional services refused for not making the required RBO filing, writes Paula Horan (pictured), managing director of Company Bureau Formations
For new and existing companies, an accurate and complete Register of Beneficial Ownership (RBO) filing is now a prerequisite to avail of professional services such as a business loan, bank account, accountancy, or legal services.
The Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2021 came into effect on 23 April 2021, transposing the 5th Anti-Money Laundering (AML) Directive into Irish law.
A major change was the definition of ‘Designated Persons’ who must now perform enhanced due diligence and background checks when onboarding new clients.
The Act has given support to the recently created Register of Beneficial Ownership (RBO). Corporate service providers such as Irish banks, solicitors, auditors, and tax advisors have been classified as ‘Designated Persons’ and as such, have extra on-boarding requirements..
Such Designated Persons are prohibited from taking on new clients until they have confirmed the company’s beneficial ownership filings are accurate and up to date.
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Company Bureau have found that c.52% of new corporate bank account applications are being refused by the banks due to non-compliance with AML rules.
Instead of assisting new client companies to meet their compliance obligations, many providers are refusing services when RBO records have not be filed within the central register.
We would like to see more awareness and support for Irish businesses in meeting their compliance obligations. As a Trust and Company Service Provider, Company Bureau is a Designated Person, and it is our policy to inform and assist our clients in meeting their obligations.
All new companies are obliged to disclose full information on their beneficial owners within five months of incorporation. The Register of Beneficial Ownership recently began contacting some 40,000 Irish companies who are yet to comply.
Once a written warning has been received, it could be followed by prosecution and penalties. Relevant entities may be liable on summary conviction to a Class A fine of up to €5,000 and on conviction on indictment to a fine of up to €500,000.
Filing can be made online through the RBO website or through a licenced corporate service provider. No paper forms or filing are accepted.
What information needs to be filed with the RBO?
Detailed information of all beneficial owners with more than a 25% stake in a private company, trust, industrial and provident society, or other applicable entity must be filed with the central RBO.
The following must be disclosed for proper identification of each beneficial owner: full name, date of birth, nationality, residential address, PPS number, and a statement outlining their level and means of control. (e.g. controlling shareholder holding 33% of company shares)
In addition to making the RBO filing with the central register, Irish companies are also required to maintain an internal register of beneficial ownership under the 4th Anti-Money Laundering Directive.
Any changes in an entity’s Beneficial Owners must also be filed to update the central register, as well as the company’s own internal register.
The Criminal Justice Act 2021 will increase the reporting obligations for Designated Persons while improving Irish company compliance with the RBO. There is no doubt that this enhanced AML framework will ensure a more transparent financial system in Ireland.
