At the beginning of 2022, Law no.315/2021 on the amendment and completion of Law no.129/2019 on preventing and combating money laundering and terrorist financing came into force, from which we mention the following amendments:
Legal entities subject to obligation of incorporation within the Trade Register shall submit upon registration and whenever a change occurs a declaration on the beneficial owner of the legal entity, for registration in the Register of beneficial owners of companies.
This obligation shall be deemed to be fulfilled for legal entities that have filed at least one declaration on the beneficial owner after the date of entry into force of this law.
The obligation is also fulfilled by including, upon registration, in the Articles of association, the identification data of the beneficial owners and the manner in which control over the legal entity is exercised.
As an exception, to the above obligation, legal entities subject to obligation of registration within the Trade Register, which have in their shareholding structure entities registered/registered and/or which have their fiscal headquarters in jurisdictions that are not cooperating from a fiscal point of view and/or in jurisdictions with a high risk of money laundering and/or terrorist financing and/or in jurisdictions under monitoring by relevant international bodies, for money laundering/terrorist financing risk, submit annually a declaration on the beneficial owner of the legal entity for registration in the Register of Beneficial Owners of Companies within 15 days of the approval of the annual financial statements.
In the event of a change in the identification data of the beneficial owner, the declaration shall be submitted within 15 days from the date of the change.
The declaration on own responsibility of the legal representative of legal entity shall include the identification data of the beneficial owners, i.e. name, surname, date and place of birth, personal identification number, series and number of the identity card, citizenship, domicile or residence, as well as the ways in which control over the legal entity is exercised.
The declaration of beneficial ownership may be in the form of a privately signed document or in electronic form and may be submitted to the Trade Register Office by electronic means, with an electronic signature, or by post or courier service or through the Trade Register Office counter, in person or by representative,
Failure by the legal representative of legal entity to comply with the obligation to submit the declaration on the identification data of the beneficial owner shall be sanctioned with a warning or a fine of 5,000 lei to 10,000 lei.
With effect from 26.11.2022, several amendments have been included in the Law no. 265/2022 on the Trade Register, including the fact that newly established companies are obliged to include in their Articles of association the details of the beneficial owners and the manner in which control over the company is exercised.
If the beneficial owner of the company changes after 26 November, I believe that the update should be made in the manner required by Law no. 265/2022, by updating the Articles of association, which should transpose all the provisions required by law on the beneficial owner and the exercise of control over the company.
Another interesting aspect in the matter of beneficial owners is the decision of the Court of Justice of the European Union in related cases C-37/20 | Luxembourg Business Registers and C-601/20 | Sovim, which found the provision of the Anti-Money Laundering Directive not valid, which provides that information concerning the beneficial owners of corporate entities registered in the territory of the Member States be accessible in all cases to any member of the general public.
From the motivation of the decision we mention:
The Court considers that the regime introduced by the Anti-Money Laundering Directive constitutes a considerably more serious infringement of the guaranteed fundamental rights to respect private and family life and the protection of personal data in the EU Charter of Fundamental Rights than the previous regime […] without that aggravation being outweighed by any benefits […].
The optional provisions allowing Member States to make information on beneficial owners subject to online registration and, respectively, to provide, in exceptional circumstances, for derogations from the general public access to this information are not, by themselves, capable of demonstrating either a balanced between the general interest objective pursued and the fundamental rights enshrined in Articles 7 and 8 of the Charter, or the existence of sufficient safeguards allowing data subjects to protect their personal data effectively against the risks of abuse.
It should be noted that the CJEU does not resolve national litigation on such matters, and it is for the national court to resolve the case. This decision is, however, equally binding on the other national courts that are seized of a similar issue.
I believe that the year 2022 has been an eventful year in terms of legislative changes in the area of preventing and combating money laundering and terrorist financing, i.e. beneficial ownership, which is directly reflected in the reporting obligations and in the way this information is registered with the Trade Register.