The European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2016 (the "Regulations") were enacted on 15 November 2016.
They implement certain provisions of the Fourth Anti-Money Laundering Directive 1 EU/2015/849 (the "4AML Directive") relating to obtaining and maintaining beneficial ownership information on clients/customers.
The Regulations apply to any Irish corporate entities and accordingly impact corporate investment funds (investment companies and ICAVs) as well as Irish AIFMs and UCITS management companies ("mancos") (collectively the "Relevant Entities").
Corporate entities that are (i) listed on a regulated market subject to disclosure requirements consistent with EU law such as the Transparency (Directive 2004/109/EC) Regulations 2007; or (ii) subject to equivalent international standards which ensure adequate transparency of ownership information are exempt from the Regulations.
In an investment funds context, the Regulations do not apply to non-corporate fund structures such as unit trusts, investment limited partnerships or common contractual funds.
The 4AML Directive is due to be transposed into Irish law on 26 June 2017. However the Regulations have transposed the requirements of Article 30(1) (relating to beneficial ownership information requirements) in advance.
The Regulations have immediate effect from the date of enactment (15 November 2016) with no transitional provisions or grandfathering period.
The explanation given for the early transposition of this aspect of the 4AML Directive is that corporate entities will need time to gather the necessary beneficial ownership data in advance of the other related elements of the Directive being implemented (i.e. the requirement to establish a central register of beneficial ownership (Article 33(3) of 4AML Directive). It could be inferred from this that there an expectation that all corporate entities will not be in immediate compliance with the Regulations. However, in the absence of any express transition provisions, all affected entities should ensure they are compliant as soon as possible.
As of 15 November 2016, Relevant Entities are required to maintain a register of their beneficial owners (the "Beneficial Ownership Register").
Beneficial owners are natural persons who ultimately own or control a legal entity through a shareholding/ownership interest of more than 25%. This can be through a direct...