_Meeting the international requirements for transparency of legal persons under the Fourth Anti-Money Laundering Directive, the Luxembourg government presented on Wednesday, December 6, the 7217 bill establishing a register of ultimate beneficial owners ("BO") in Luxembourg.
This register, introduced under the abbreviated name of REBECO, will be managed by the RCSL economic interest group in charge of the Registre de Commerce et des Sociétés (RCS) and will be responsible centralising and maintaining data concerning the BO (e.g. first name, surname, citizenship(s), date and place of birth, etc.) of all legal persons1 registered with the RCS (the registered entities), excluding companies whose securities2 are tradable on the regulated market3 and subject to a transparency regime.
This information must be accurate, complete and up-to-date. The 7217 bill suggests in this regard that supporting documents should be provided when registering the information in question with REBECO, without further specification. This data must be communicated in electronic form by all registered entities (the latter will be responsible for these declarative obligations, which will be accompanied by dissuasive sanctions), including – of course – those registered in the RCS before its entry into force of law. The concerned entities will then have six months from entry into force of law to comply with these obligations
It should be noted that the information contained in REBECO will not be public and access to the register will be restricted to the Luxembourg administrative, police and judiciary authorities (together, the national authorities), Luxembourg self-regulatory organisations, professionals involved in the fight against money laundering and, to a lesser extent, individuals or organisations residing in Luxembourg and demonstrating a ‘legitimate interest’ in knowing the details of a BO. Requests from the latter category (of non-professionals) will thus be screened by a coordinating commission under the authority of the Minister of Justice (the Commission), with responsibility for assessing the underlying motivations of the applicant.
As it stands, the 7217 bill does not contain any characterisation of ’legitimate interest’ that would allow access to REBECO data; it seems that this concept must be assessed in concreto, i.e. on a case-by-case basis and according to the circumstances of the case presented by the claimant.
It should be noted that certain provisions of the 7217 bill are already evolving, particularly those relating to the protection of personal data. Indeed, the law of 2 August 2002 on the protection of individuals with regard to the processing of personal data should soon be repealed and replaced by Regulation (EU) 2016/679 of 27 April 2016, which will enter into force in May 2018.
The table reproduced below aims to summarize the principles laid down in the 7217 bill, thus providing a better grasp of this future REBECO, which is the subject of significant questions.
Information on the BO to provide in/to the REBECO
|Persons authorised to access the REBECO and conditions of access||Criminal sanctions provided|
Following article 3 of the 7217 bill, entities registered with the RCS or their agent are required to provide / keep updated:
of their BO, to/with the REBECO.
These issues are governed by chapter 4 of the 7217 bill. The following persons:
Sanctions for declaratory failure are provided for in chapter 8 of the 7217 bill as follows:
Please note that this presentation does not claim to answer all the questions raised by the 7217 bill and the establishment of REBECO. One of the highlights will most certainly be the Commission's assessment of the concept of ‘legitimate interest’ (does a journalist seeking to document an investigation have a legitimate interest in accessing the REBECO database?). Faced with these uncertainties, we cannot help but fear possible abuses ... Yet, we should not forget that business life is imbued with a certain degree of confidentiality necessary for the conducting of business.
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1. Luxembourg branches of foreign companies, although registered with the RCS, should thus not be concerned as they do not have legal ‘personhood’ of their own.
2. In our view, the term ‘securities’ refers to both capital and debt securities.
3. Although the 7217 bill does not refer to it, it seems to us that the term ’regulated market’ must be understood here in the meaning of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 concerning markets in financial instruments.
4. Without knowing what this concept exactly covers, the recital 13 of the Fourth Anti-Money Laundering Directive only refers to the ‘approximate weight’ of such interests; is it the value, respectively the valuation, of the possessions in question? This point will certainly have to be clarified.
5. It should be noted that the applicant should be able to challenge before the administrative courts a refusal decision by the Commission. The comments in the 7217 bill suggest that the registered entity involved in the access request could also object to a decision by the Commission.