The UBO register (and with it the information and feedback requirement) is coming!

The ink of the Fourth Anti-Money Laundering Directive is barely dry and the Fifth Anti-Money Laundering Directive has already made its appearance. With it, the long-awaited UBO register will finally become a reality. The Netherlands will most likely implement the UBO register by Jan. 10, 2020. What obligations will business owners (and attorneys) face?

UBO register

The UBO register is a register managed by the Trade Register of the Chamber of Commerce. That register must include personal data of all UBOs (in proper Dutch: Ultimate Benifical Owners).

Who are they? A UBO is a natural person who ultimately owns or controls a legal entity. Very briefly, it involves actual control or more than 25% of the shares or voting rights. So not only the director-major shareholder, but also the holder of golden shares and even the departed pater familias on paper who actually still controls the ins and outs of the company. And what if no UBO can be designated based on these parameters? This is conceivable, for example, in the case where a private limited company has six shareholders, each with equal profit and voting rights (15%) without actual control. In that case, a so-called pseudo UBO must be designated. In the Netherlands, this is one or more directors. Incidentally, exceptions include sole proprietorships and VvEs.

What data will be in the UBO register?

• first name and last name;
• month and year of birth;
• nationality;
• residential state;
• nature and extent of the UBO's economic interest.

I hear you thinking: that's all going pretty far. True, but what specific obligations will business owners (and attorneys) actually have regarding this information?

Commitments for business owners

As of January 10, 2020, the people in charge of a company (read: directors of legal entities as well as partners of partnerships) are obliged to collect the necessary UBO information within their company and register it in the Trade Register of the Chamber of Commerce. They are also expected to constantly monitor whether this information is still correct and complete. UBOs are obliged to cooperate in providing the requested information. Does a director refuse to register the UBO information or does a UBO refuse to cooperate? If so, this constitutes an economic offence under the Economic Offences Act.

Commitments for attorneys

But that's not all. Indeed, the advent of the UBO register also brings with it expanded obligations for attorneys providing Wwft services. They are expected to actively report UBO information that is not correctly or completely recorded in the Trade Register (the so-called feedback obligation). A concrete example: a lawyer supervises a takeover, as a result of which the UBO changes. Based on file knowledge, he has become aware of new information regarding the UBO. In that case, the Wwft obliges him to submit the new UBO information to the Trade Register. As with business owners , violation of this obligation constitutes an economic offence under the Economic Offences Act.

In short, the UBO register entails far-reaching obligations. Both for business owners and for attorneys. One consolation: we still have until mid-2021 to submit UBO information to the Trade Register.