The UBO legislation
On 14 August 2018, the royal decree (the "Royal Decree") determining the operating procedures of a central register of ultimate beneficial owners ("UBO(s)") has been published in the Belgian Official Gazette. It will enter into force on 31 October 2018.
The Royal Decree implements into Belgian law the Act of 18 September 2017 on the prevention of money laundering and terrorist financing and the restriction on the use of cash (the "Act"), transposing article 30 of the European Directive (EU) 2015/849 of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing.
The Act provides for the obligation for all Belgian companies, associations, foundations, trusts, fiduciary relationships and other similar legal structures to submit adequate, accurate and current information on their UBO(s) into a central register in Belgium (the "UBO register"). If a legal entity is subject to the reporting obligation, it is the governing body of the legal entity that must ensure compliance with the reporting obligation. Further technical modalities of the UBO register will be implemented through a ministerial decree.
Who should be considered as an UBO?
An UBO in relation to a company is any individual who either:
- has a direct or indirect ownership in the company concerned of more than 25% of the company's voting rights or share capital, or
- exercises, or has the right to exercise, control over the company concerned (such as the right to appoint or remove a majority of the members of the administrative, management or supervisory body or the right to exercise a dominant influence pursuant to a contract entered into with the company or to a provision in its articles of association).
If the aforesaid individual(s) cannot be identified, the member(s) of the senior management are considered UBO(s).
Other rules to identify UBOs apply for associations, foundations, trusts, fiduciary relationships and other similar legal structures.
UBO information to be reported
The companies subject to the UBO reporting obligation must file with the UBO register the following information for each of their UBOs:
- name and first name;
- date of birth;
- nationality(ies), address and country of residence, national identification number;
- date at which the individual has become an UBO;
- the type of UBO (i.e. holding at least 25% and/or controlling, or senior management);
- whether the individual fulfills the criteria separately or jointly with other individuals;
- whether the individual is a direct or an indirect UBO (and, if indirect, the number of intermediate holding entities and their identification details); and
- scope of the ultimate interest owned, such as the proportion of the voting rights or share capital.
The required UBO information needs to be transmitted electronically. All relevant technical modalities in this regard will be detailed in a ministerial decree.
Belgian legal entities are required to submit the UBO information by no later than 30 November 2018. Any subsequent filings must be done within one month after the information is either known or modified.
Access to the UBO register
The UBO register will be accessible to:
- authorities (including tax authorities);
- any entities which have a duty of diligence regarding their customers; and
- any ordinary person (who, as far as the UBO information relating to companies is concerned, does not need to demonstrate any legitimate interest).
Ordinary persons (referred to under 3. above), however, will not have access to the first name, the date of birth, the residential address and the national identification number of an UBO.
In addition, in exceptional circumstances and upon request of any UBO, the Treasury Department of the Federal Public Service Finance may limit the access of entities which have a duty of diligence regarding their customers and/or ordinary persons (referred to under 2. and 3. above) to certain parts of the information on such UBO, or prohibit any access to such entities and/or persons. The Treasury Department will consider such requests on a case by case basis when there are factors demonstrating that access to UBO information could expose the UBO concerned to a risk of fraud, abduction, blackmail, violence or intimidation or when the UBO concerned is under age or incapable of legal action.
Sanctions in case of non-compliance
In case a legal entity fails to comply with its reporting obligations, its directors or governing bodies can incur several sanctions. The Minister of Finance has the authority to impose on the directors or governing bodies an administrative fine ranging between EUR 250 and EUR 50,000. Also, a court may charge the directors or governing bodies with a criminal fine ranging between EUR 50 and EUR 5,000 (to be multiplied by the applicable surcharges). Finally, the directors or governing bodies are also subject to the ordinary liability regimes in case of non-compliance with the Belgian Company Code or the law in general.