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19 Dec '19
On 10 December 2019 the legislative proposal “Implementation of the registration of ultimate beneficial owners of legal entities” (the “Legislative Proposal”) has been adopted by the Dutch Parliament (Tweede Kamer). The Legislative Proposal amends the Dutch Trade Register Act 2007 (Handelsregisterwet 2007), Dutch Money Laundering and Terrorist Financing Prevention Act (Wet ter voorkoming van witwassen en financieren van terrorisme) (the “Wwft”) and several other Dutch acts in relation to the obligation to have, maintain and register the information of ultimate beneficial owners (“UBOs”) of Dutch legal entities in one central register (the “UBO-register”). The implementation of the UBO-register is one of the measures included in the Fourth anti-money laundering Directive (Directive (EU) 2015/849) (the “Directive”). For an overview of the aspects of the Dutch UBO-register, we refer to our previous newsletter dated 30 august 2018. The Legislative Proposal has been slightly amended in relation to its previous version. In this newsletter we will discuss these amendments and the further implementation of the Legislative Proposal.
An exemption in relation to the registration of UBOs of denominations (kerkgenootschappen) (including but not limited to churches and mosques) was included in the previous version of the Legislative Proposal. This exemption has been removed from the new version of the Legislative Proposal. Furthermore, additional guarantees in relation to the safety and privacy of UBOs have been included in the Legislative Proposal. Only persons and entities who have been identified in advance will be granted access to the UBO-register. In addition thereto, UBOs will be granted insight in the number of information requests which have been received (except in relation to the times that such information has been provided to the Financial Intelligence Unit and other competent authorities). Please note that, the UBO will not be provided with details on the identity of the user which requested this information. The UBO will only receive an overview of the categories of users (such as Wwft-institutions) which requested the UBO’s information. In the event that an institution on which the Wwft is applicable finds a discrepancy between the UBO’s information which it obtained via its client investigation and the information listed in the UBO-register, such institution should make a notification thereof. The Wwft also applies to certain activities performed by attorneys-at-law and civil-law notaries. However, they are also bound by a duty of secrecy (geheimhoudingsplicht). A second amendement (Tweede Nota van Wijziging) dated 10 December 2019 clarifies that this duty of secrecy will not apply in relation to the notification duty regarding any discrepancies in the UBOs’ information. A similar exemption has already been included in the Wwft in relation to the notification duty in the event of an unusual transaction. In addition, the Dutch Secretary of Finance (Minister van Financiën) has clarified the exemption for 100% subsidiaries of listed entities in a letter dated 3 December 2019. Dutch listed entities will not be obliged to register the information of its UBO(s). Dutch 100% subsidiaries of entities listed on a regulated market within the EU/EER are also exempted from the duty to register the information of its UBO(s). The Dutch Secretary of Finance has clarified that this exemption applies to both direct and indirect 100% subsidiaries. However, it remains unclear whether this exemption also applies to Dutch 100% subsidiaries of entities which are listed at a regulated market outside the EU/EER.
Based on the Directive, the Legislative Proposal must be implemented ultimately on the 10th of January 2020. Before the Legislative Proposal can come into effect, it still must be adopted by the Dutch Senate (Eerste Kamer). It is expected that the deadline of 10 January 2020 will not be met. After the Legislative Proposal comes into effect, entities with a registration duty will have one and a half year to register the information of its UBO(s) with the Dutch trade register (handelsregister) of the Dutch Chamber of Commerce (Kamer van Koophandel). Entities with a registration duty which are incorporated after the Legislative Proposal comes into effect will have the duty to register the information of its UBO(s) simultaneously with its registration in the Dutch trade register of the Dutch Chamber of Commerce. Please do not hesitate to contact our Banking & Finance team if you have any further questions regarding the consequences of the Legislative Proposal for you.
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