Luxembourg Business Registers produce explanatory guide

News

Luxembourg Business Registers produce explanatory guide, “Declaration of Beneficial Owners to RBE”

27 June 2019

Regulatory News Alert

Context and objectives

On 21 June 2019, the Luxembourg Business Registers (LBR) published an explanatory guide prescribing the methodology for the declaration of Beneficial Owners to the RBE (the “Guide”).

EU Directive 2015/849 (the AML Directive) provides rules on the prevention of the use of financial systems for the purposes of money laundering and/or terrorism financing. As such, Articles 30 and 31 of the AML Directive introduce the requirement for each Member State to establish beneficial ownership register.

For this purpose, the Luxembourg government has adopted the Law, as of 13 January 2019, on the Register of Beneficial Owners establishing an electronic central register of beneficial owners for the legal entities registered in the Luxembourg Trade and Companies Register.

The Guide released by the LBR therefore helps entities to determine their beneficial owners by providing a methodology and a list of illustrative examples to clarify the declaration of beneficial owners to the RBE before 31 August 2019.


A defined methodology

A key element highlighted by the LBR is the definition of beneficial owner. The term is defined by reference to the Law of 12 November 2004, as amended, regarding the fight against money laundering and terrorism financing (the AML Law).

Hence, the beneficial owner is any natural person who ultimately owns more than 25 percent of the shares of a legal entity, or who may otherwise own less than 25 percent, but exercises control over the entity.

If no natural person can be identified per this criteria, the natural person acting as principal manager of the legal entity will need to be registered.

According to this definition, the Guide released by the LBR offers a method to identify a beneficial owner based on three steps:

  • Calculate the percentage of ownership of capital (mathematical approach)
  • Determinate the person who effectively controls the entity, through voting rights or through control via other means (a person owning +50 percent of voting rights is considered exercising the control of the entity)
  • If no real beneficiary can be identified: the members of the board of directors or the management body are considered as the beneficial owner.


A list of illustrative examples

The Guide seeks to clarify how entities should apply this methodology by providing a list of illustrative examples:

  • Direct ownership
  • Indirect ownership 
  • Control of the entity via other means
  • No real beneficiary can be identified
  • Minor or legally incapable
  • Non-profit organizations
  • Public-law institutions
  • Foundations
  • Company in liquidation 
  • Company in liquidation where no real beneficiary can be identified
  • Listed companies
  • Subsidiary of listed companies

The LBR reminds entities that the proposed schemes are only examples of reasoning to determine beneficial ownership, and that institutions bare the final responsibility of conducting the necessary research to determine their actual beneficiaries, before proceeding to their registration in the RBE.


How can Deloitte help?

In this rapidly evolving crossroads between regulations, Deloitte can help you stay ahead of the game with our Kaleidoscope Regulatory Watch services, which monitors and analyses upcoming changes.

Deloitte’s AML/CTF advisory specialists and dedicated services will also help you design and implement your renewed business strategy in light of the future evolution of the AML/CFT framework.

Deloitte AML services:
  • AML/KYC remediation plan
  • AML/CTF training
  • AML/CTF policy, procedure, and process design or review
  • DKYC: externalizing KYC processes
PDF - 71kb

Contacts

Pascal Eber
Partner – Operations Excellence & Human Capital
Tel : +352 45145 2649
peber@deloitte.lu

Eric Collard
Partner – Forensic & AML, Restructuring
Tel : +352 45145 4985
ecollard@deloitte.lu

Simon Ramos
Partner – IM Advisory & Consulting 
Leader
Tel : +352 45145 2702
siramos@deloitte.lu

Jean-Philippe Peters
Partner – Risk Advisory
Tel : +352 45145 2276
jppeters@deloitte.lu

Bastien Collette
Director – Advisory & Consulting (AML/CTF)
Tel : +352 45145 3372
bacollette@deloitte.lu

Alice Lehnert
Director – Advisory & Consulting
Tel : +352 45145 2605
alehnert@deloitte.lu

Benoit Sauvage
Director – RegWatch, Strategy & Consulting
Tel : +352 45145 4220
bsauvage@deloitte.lu

Marijana Vuksic
Manager – Regulatory & Consulting
Tel : +352 45145 2311
mvuksic@deloitte.lu

Did you find this useful?