In September 2018 we wrote an alert on the Dutch implementation of the 4th Anti-money laundering (EU) Directive (‘Directive’) and the introduction of a so called ‘pseudo’ UBO. The first draft of the Dutch legislative proposal (in which a UBO-register is introduced) was submitted to the Dutch parliament on April 3, 2019. Certain amendments and clarifications to the above mentioned proposal were presented by the Minister of Finance on October 4, 2019. The most significant amendment is the introduction of two measures to improve the privacy of the (pseudo) ultimate beneficial owners (‘UBO’s’).
What is the UBO-register?
The UBO-register is a register that contains certain personal details of UBO’s of Dutch corporate entities and other legal entities that are incorporated or established under Dutch Law. The entities that are subject to the registration are private limited liability companies (BV’s), public limited companies (NV’s), cooperatives (coöperaties) and limited partnerships. Non-Dutch corporate entities that have a principal place of business or a branch office in the Netherlands are excluded.
The register is going to be part of the Dutch Trade register and is managed by the Dutch Chamber of Commerce (‘CoC’).
What UBO-information will be registered?
Publicly accessible information will be the name and surname, month and year of birth, nationality, country of residence and the nature and scope of the economic interest held by the UBO’s (which will be presented in fixed ranges). This information will be publicly accessible with a valid registration and in exchange for a fixed fee.
In addition to the required registration and fee, the Minister of Finance introduced two measures to further improve the privacy of the UBO’s:
(i) the identity of the persons who access the register will be registered; and
(ii) the number of consultations of the UBO-information will be visible to the respective UBO (except for access by the competent authorities and financial institutions).
Can a UBO block its UBO-information?
Upon registration with the CoC, the UBO can submit a request to the CoC to block its publicly available UBO-information. This request will result in an immediate restriction of access to such information (except for the nature and scope of the economic interest held). The restriction will only be lifted if the request is rejected and the decision in a formal objection and appeal procedure (if any) has become final.
In order to submit a request to block the publicly accessible information, the UBO must demonstrate that at least one of the following restriction grounds apply:
(i) exposure to disproportionate high risk;
(ii) exposure to a risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation; or
(iii) that the UBO is underage or has been declared legally incompetent (handelingsonbekwaam).
It is uncertain, however, if the first two grounds in itself will be successfull since the draft implementation decision of May 20, 2019 seems to imply that these two restrictive grounds will only lead to a justification for blocking the publicly available information if such person is (also) under the protection of the Public Persecutor or the National Coordinator for Counterterrorism and Security.
Implementation
The Directive has to be implemented prior to January 10, 2020 and it looks like the Dutch parliament is going to make this timeline. After the implementation, existing Dutch entities have 18 months to provide the following information to the CoC: (i) the publicly available information as set out above, and (ii) the following non-public information: address of the UBO, day and place of birth, fiscal identification number, passport copy and documents showing the UBO status. Newly incorporated Dutch entities will need to register their UBO-information simultaneously with their first registration in the CoC.
The full text of the Dutch legislative proposal of April 3, 2019 and the draft implementation decision of May 20, 2019 can be found here (available in Dutch only):
https://www.eerstekamer.nl/behandeling/20190403/voorstel_van_wet/document3/f=/vkxdlrx38oy4.pdf and https://www.internetconsultatie.nl/ubo/document/4607
For more information:
Martina Priekaar
Anna Zhu
