The European hunt for money launderers and terrorist financiers continues fearlessly. Regardless of what the consequences of how that happens might be for you as an entrepreneur. In that light, the deadline for the UBO register is also fitting. As of March 27, 2022, the approximately 1.7 million companies listed in the Dutch Trade Register must register their Ultimate Beneficial Owners (UBOs).(1) Just like the many companies in other EU member states must do so in their national UBO register.
In doing so, the public disclosure of personal data serves as a deterrent to the ultimate stakeholder(s) within organizations that would intend to launder money or fund terrorist activities. Something that is of course fully possible through legal entities located outside the EU, such as through Panama, Jersey, Guernsey or simply the United States. Financial institutions will and must therefore regularly consult the UBO register in order to comply with their obligations under the Wwft, among other things.(2) If a UBO registration does not match the data it has on the client, a financial institution must inform the Chamber of Commerce of this pursuant to its obligation to report back, under penalty of a fine. Also, such discrepancies quickly lead to a "breach of trust" and termination of the relationship.(3)
The Privacy First Foundation was unable to avoid the March 27, 2022 deadline: the Court of Appeal of The Hague(4) upheld the district court's ruling(5) and ruled that ht UBO register does not constitute a privacy violation for UBOs(6) whose personal information is made public.
There is a lot to do about the UBO register and the information it will release. A "CoC extract" costs EUR 2.50 and for that money you now know immediately who is really pulling the strings - and that information will soon be in the wrong hands.(7) According to the Court of Appeal, however, it is not likely that the obligation to register the UBO will lead to serious damage in the short term, among other things because the UBO can submit a request to have his data shielded from the public when a company is incorporated. On what grounds such a request will be honored and rejected is not yet clear, by the way.
There are some preliminary questions pending before the European Court of Justice, regarding the openness of the UBO register.(8) The answers to these will not follow until mid-2022, so after the deadline for registration has already passed. Without a European judgment, the Dutch court cannot stop it either.
Newly incorporated companies have already had to register their UBOs since September 27, 2020. Should the European Court of Justice eventually draw a line under the public nature of the UBO-register or impose significant restrictions on it, many Dutch companies have already registered their UBO and made their personal data public. It is therefore possible that the Dutch legislator will decide to postpone the deadline for UBO registration.
So do all businesses have to register? No, not all companies. An exception(9) applies to sole proprietorships, listed companies and associations. Note: the statutory directors of the foundation must be registered (as pseudo-UBO)(10) just like the statutory directors of the association.
Footnotes
(1) https://rwv.nl/nieuws/2020/02/het-ubo-register-wordt-ingevoerd-wat-betekent-dit-voor-uw-onderneming-aandeelhouders-en
(2) https://rwv.nl/nieuws/2019/08/ondernemers-opgelet-ook-uw-bank-beeindigt-klantrelaties-in-het-kader-van-de-wwft-wat-te-doen-als
(3) https://rwv.nl/nieuws/2019/09/mijn-bank-stelt-vragen-over-de-ubos-van-mijn-klanten-wat-nu
(4) https://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:GHDHA:2021:2176
(5) https://rwv.nl/nieuws/2020/09/wie-kwalificeert-als-een-ubo
(6) https://nos.nl/nieuwsuur/artikel/2309253-ondernemers-vrezen-anti-witwasregister-crimineel-kan-slachtoffer-uitkiezen
(7) https://eur-lex.europa.eu/legal-content/NL/TXT/?uri=CELEX:62020CN0601
(8) https://www.kvk.nl/advies-en-informatie/top-5/de-belangrijkste-vragen-over-het-ubo-register/
(9) https://rwv.nl/nieuws/2
