Beneficial Ownership

What’s going on at European Level

Version 2

Vito Giannella, Cardiff, 11th of May 2016

Beneficial Ownership

Transparency International view

G20 Leaders are good at making promises – but not at keeping them sparency

At EU level …

• 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 (4th Anti Money Laundering Directive)

• CHAPTER III - BENEFICIAL OWNERSHIP INFORMATION

• ECRF Working Group on BO Registers

BO definition • Quantitative approach : A shareholding of 25 % plus

one share or an ownership interest of more than 25 % in the customer held by a natural person shall be an indication of direct ownership

• What about «indirect control»? (Global Witness says that «in UK 410.000 persons control UK companies indirectly»)

Adequate information• Sufficient to identify the BO– Name, date of birth, personal ID number, address,

nationality, residence, exercised control.– Suggestion : information about legal ownership (data

on directors and shareholders)– What about privacy?

Accurate information• Appropriate checks have been conducted to

verify the legitimacy of the information

• The BO registries to assume a more «pro-active» role?

Current information• Updated information

• Annual confirmation required?• Communicate changes within a defined

timeframe after they occur?

Information Access• Timely and unrestricted to Competent

Authorities - national or International?

• Any person demostrating legitimate interest

What is needed

• International co-operation

From the last ECOFIN meeting : “We welcome the fact that all Member States will enter into a pilot project for the automatic exchange of information on ultimate beneficial owners. Furthermore the Netherlands Presidency will take forward the work on the amendment to the 4th Anti-Money Laundering Directive which, as the Commission announced, will be submitted to the European Parliament and the Council in June”.

“In particular to enhance accessibility of beneficial ownership registers on corporate and other legal entities, as well as on trusts and similar legalarrangements, to clarify the registration requirements for trusts, to speed up theinterconnection of national beneficial ownership registers, promote automatic exchange of information on beneficial ownership between authorities, and strengthen customer due diligence rules”.

What is needed• Financial institutions need technology that provides

powerful visualization capabilities to aid in mapping complex organizational structures. The best solutions can automatically link ownership data and create a schema that illustrates the beneficial owner(s) and the relationships among related entities (Fiserv White Paper, written by Andrew Davies and Irina Burkat, April 2016)

The EBOCS solution

vito.giannella@unioncamere-europa.eu