Foreward by Andrew Chilvers
When the 5th Anti-Money Laundering Directive was introduced into law by the UK and EU in January 2020, for many professionals it was a much needed addition to legislation that would significantly help business transparency and combat money laundering. In essence, it was good for business and for public and professional confidence.
All jurisdictions signing up to the 5th Directive will build and maintain UBO registries that will be publicly available at any time. UBO registries will also be set up for bank accounts and trusts, although these latter two will not be publicly available but be accessed by the relevant authority such as financial intelligence units and legal advisors looking into money laundering. Investigative journalists who can show a legitimate interest in the case can also have access, which is vital if another Panama Papers (see below) is to be uncovered. Across the UK and EU national UBO registers will be set to connect through a central European platform by April 2021.
Please provide a brief overview of the UBO Register in your jurisdiction and its history?
The UBO register was implemented by law during the update on 18 September 2017 of the Anti-Money Laundering law that implemented the UBO Register. It is organized by the Government and managed by the Tax authorities. Till 31.12.2019 there was a certain acceptance on the time schedule on which every entity should comply, but the final deadline was 31.12.2019. From January 1st 2020, those entities that did not comply could be chased by the authorities and issued with penalties. Every year the entity must confirm the UBOs in the register. The access to the update of the register is related to the persons mentioned in the public company register as representatives of the company. They can give proxies to third parties such as lawyers, accountants etc. via a special digitalized proxy called CZAM, a Belgian digital signature based on the iD cart and its token.
How can your firm ensure your clients are fully compliant with the new / existing requirements?
This is part of our client acceptance rule and part of our antimoney laundering procedure.
We do not accept any client where full transparency is not guaranteed. We implemented an ERP software where the client has to identify themselves, with proof of documents in order to comply. If we are not mandated for this implementation we must obtain evidence about the existence and proof of this UBO implementation. If it is a Belgian company, we ask for a proxy to consult the UBO register. We try to convince the client to convert their shareholder’s register to a digital one, to link it directly to the UBO register.
This guarantees the update of the UBO register. Furthermore, our ERP software prompts us every year to update the register, and if one of our submissions implies a change of the UBO status, this leads automatically to an update of the UBO register.
We are certified accountants controlled by the Institute of certified accountants ITAA. This certification takes place every two years in order to verify if our procedure is efficient and up to date. If we receive penalties we can even lose our title of certified accountant.
What changes can we expect to see emerging, are any new proposals expected?
It is clear that the government will start exploiting these registers much more than they have done in the past. Certain rules on taxation will be adapted to link the revenues to the fortunes of individuals to determine the tax levels. As a general principle in Belgian culture taxation on labour must be compensated by a taxation on wealth. This register should be used to establish the relationship between the person and his wealth.
What other information might be relevant?
These days we are acting more globally and these registers will become accessible, used not only by Governments, but by the public. What will be the effect of this information on the public and will it be misused for criminal activities? Nobody knows. We see also that due to criminal events (ie 9/11), more information is being gathered for the purpose of dealing with criminal actions. But at the same time tax authorities use these events as an excuse to implement new laws to increase taxation, often using this information even if it has no relationship to criminal actions. The richer are becoming richer, the poorer are becoming poorer and the middle class will disappear. That will be the reality in the future, and these registers will help the Government to realise this goal.