Draft bill on implementation UBO register

On March 31, 2017 a draft bill on the implementation of the Ultimate Beneficial Owner (UBO) register was presented for public consultation. The bill results from the European Directive 2015/849 on the prevention of the use of the financial system for the purpose of money laundering or terrorist financing and seeks to implement a central register which contains information on ultimate beneficial owners (“UBO”) of companies or other legal entities which are incorporated in the Netherlands. The UBO register will be part of the trade register and such the Commercial Register Act 2007 will be adjusted. More details on the relevant definitions will be included in an Order in Counsel (algemene maatregel van bestuur).

Content of the bill
At least those entities which are already registered in the Commercial Register Act 2007 have the obligation to provide information about their UBO. There is an exception for one-person businesses (eenmanszaak), owners associations (verenigingen van eigenaren) and legal entities governed by public law (publiekrechtelijke rechtspersonen). The question whether a mutual fund (fonds voor gemene rekening) and informal association (informele vereniging) should also be provide their UBO-information is still ongoing.

The term ‘’UBO’’ is defined as an individual who is the ultimate owner (25% percentage) of or has control over a business or legal entity. The reduction to 10% in specific cases has not yet been incorporated in the draft bill.

In any case, the following information (the limited set of data) shall be recorded about the UBO:

• Name, month and year of birth
• Nationality and state of residence
• The type and size of economic interest held by the UBO (three categories: 25% – 50%, 50% – 75% and 75% – 100%).

In principle, everyone has access to this limited set of data. There is also a set of data which will only be accessible for certain authorities and the Financial Intelligence Unit (if the information is relevant for their monitoring and investigation activities). This set contains the following information:

• Date of birth, place and country of birth
• Address
• Citizen Service Number or foreign tax identification number
• Copies of documents verifying the identity of the UBO, which serves the substantiate why a person had the status of a UBO

For privacy protections of the UBO’s, there are a few safeguards accompanied to accessing the UBO register:

• Registration of all parties who accessed the register (except for the competent authorities and FIU).
• A fee will be charged for looking into the register
• Restriction of data that is publicly accessible (above limited set of data)
• Blocking of data, except for the type and size of the economic interest, concerning minors, otherwise legally incapacitated or other persons whereby revealing the information can lead to exposure of fraud, kidnapping, blackmail, violence or intimidation.

On the one hand, all entities for which UBO information must be entered into a register must keep the information up-to-date and the UBO is obliged to supply all the necessary information. Failing to provide information, providing information that is inaccurate or incomplete, or not providing the information on time leads to a financial offense.

On the other hand, Wwft institutions [1], the competent authorities and the FIU are obliged to notify the Commercial Register, if (or when they have doubts whether) the registered information is not adequate, accurate or up-to-date.

Implementation
The legislation of the UBO register has to be implemented no later than June 26, 2017. The consultation period runs till April 28, 2017. After that the entire legislative process must be carefully completed and the Commercial Register will thereafter have to implement the UBO register. In is expected that the time to meet the deadline of June 26 is too short.