On 6 December 2017, the Minister of Justice brought before the Chamber of Deputies Bill No. 7217, which establishes an ultimate beneficial owner register for all entities (companies and other entities with legal personality) registered in Luxembourg. The bill will transpose Article 30 of Directive (EU) 2015/849 on the prevention of the use of the financial system for purposes of money laundering or terrorist financing (the “4th AML/CFT Directive”). In the same context, a second bill, No. 7216, was simultaneously brought for the creation of a Fiduciary Register.
The ultimate beneficiary owner register (“REBECO”) will be kept with the Luxembourg Trade and Companies Registry (Registre de Commerce et des Sociétés, Luxembourg or “RCSL”). All registered entities will be included therein, except for those whose securities are traded on a regulated market in Luxembourg, in an EU Member State or in an assimilated country.
Access to the register is open to various parties: (i) national authorities (including prosecution authorities, supervisory authorities such as the financial sector supervisory authority (Commission de Surveillance du Secteur Financier or “CSSF”) or the insurance supervisory authority (Commissariat aux assurance) and tax authorities) ; (ii) self-regulating entities (including the bar counsel, chamber of notaries and independent auditor institute (Institut des réviseurs d’entreprises or IRE)) ; (iii) professionals subject to due diligence obligations under the AML/CFT law; and (iv) resident persons and organisations “demonstrating a legitimate interest”.
Additionally, the registered entities will be required to obtain and keep at their registered office current, accurate and constantly updated information on their ultimate beneficial owners. The information must be provided to national authorities and also to professionals subject to KYC obligations in the context of AML/CFT (banks, asset managers, among others) the latter for which it will be based on a reasoned request.
Under exceptional circumstances and by providing proof thereof, an entity may request that access to the Register be limited to anyone but the national authorities, when such access would expose the ultimate beneficial owner(s) to the risks of fraud, kidnapping, blackmail, violence or intimidation, or when the ultimate beneficial owner is a minor or incompetent.
In case of infraction of the law, particularly if an entity does not send its request for registration with the RCSL by the required deadline, or does not keep the required information at its registered office, it is subject to the criminal sanction of a fine ranging from EUR 1250 to EUR 1 250 000.
Entities will have six (6) months after the entry into force of the law within which to get themselves current.