Last updated: 2 October 2019
On July 21, 2019, running behind schedule, came into force the Law 129 from July 11, 2019 on the prevention and the combat against money laundering and terrorist financing (published in the Official Gazette no. 589 from July 18, 2019).
Indeed, two years later than the due date, June 26, 2017, established for the transposition by the UE member states in their national legislation of the 4th Directive on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, the Law 129/2019 transposes both the UE Directive 2015/849 of the European Parliament and of the Council from May 20, 2015 and of the UE Directive 2016/2.258 of the Council from December 6, 2016. The normative act in question also repeals the former national regulation in the field of combat against money laundering, namely the Law 656/2002 on the prevention and the combat against money laundering.
IDENTIFICATION OF THE BENEFICIAL OWNER OF THE COMPANY
According to the new law, the beneficial owner is any natural person who ultimately owns or controls the customer and /or the natural person on whose behalf a transaction or activity is being conducted.
- The beneficial owner of the companies incorporated under the Companies’ Law 31/1990
When it comes to corporate entities, the beneficial owner is the natural person(s) who ultimately own or control the company through direct or indirect ownership of a sufficient percentage of the shares or voting rights or ownership interest in that entity or through control via other means. A shareholding of at least 25% of the share capital plus one share or ownership of more than 25% of the share capital of the legal person would be an indication of such criteria being met.
As a novelty, the Law 129/2019 pursuant to the UE Directive 2015/849, states that if the beneficial owner of the company cannot be identified then the beneficial owner of the entity shall be the natural person(s) who hold the position of senior managing official(s) (director, CEO, etc.).
- The registry of beneficial owners of the legal entity
Entities subject to registration with the Trade Registry, except for state owned entities such as autonomous administrations and national companies, have the obligation to transmit, through their legal representative, a Declaration on the beneficial owner of the legal entity, in order to be registered in the beneficial owners’ Registry held by the National Office of the Trade Registry.
The timetable:
a. Within the 12 months following the entry into force of the Law – for companies already incorporated;
b. Upon incorporation of the company – for the companies to be set up and incorporated after the entry into force of the law;
c. Yearly, within the 15 days following the approval of the annual accounts ;
d. Within 15 days since the date the identification details of the beneficial owner should change in anyway whatsoever.
The Declaration of the legal representative of the legal entity shall contain information about: (i) the identification details of the beneficial owners and (ii) the control means over the legal entities. Such declaration may be passed directly in front of the Office of the Trade Registry or be submitted in the form of an authenticated declaration. The identification details of the beneficial owners are: name, surname, birth date, personal identification number, series and number of the identity documents, citizenship, domicile or residence.
The set up and operation of the Beneficial Owners’ Registry of the companies shall be regulated by the Trade Registry within the 120 days from the entry into force of the law.
The same provisions also apply for the identification of the beneficial owners of branches.
Sanctions
Should the legal representative fail to observe the obligation to transmit the Declaration on the identification of the beneficial owner, such failure shall be an offence punishable by a penalty amounting between LEI 5.000 and LEI 10.000. In certain cases, such failure may also result in the Trade Registry asking for the dissolution of the company. In this case the company is allowed to correct such incompliance and transmit the declaration on the identification of the beneficial owner within 30 days.
IDENTIFICATION OF THE BENEFICIAL OWNER OF ASSOCIATIONS AND FOUNDATIONS
The adoption of the Law 126/2019 entailed amending accordingly the provisions of the Government Ordinance 26/2000 on associations and foundations, therefore the beneficial owner of such entities is defined – just as in the case of companies – as any natural person who ultimately owns or controls the customer and /or the natural person on whose behalf a transaction or activity is being conducted.
- The beneficial owner of associations and foundations
As far as the associations and foundations are concerned, the notion of beneficial owner includes:
a. The members of the Directorate, in the case of associations, as well as the founders and the members of the Directorate, in the case of foundations;
b. The senior managing officials, appointed pursuant to the law, by the Directorate of the association or of the foundation;
c. The natural persons on whose main interest such entity, association or foundation, was set up and operates, or where the beneficiaries have yet to be determined, the class of such persons;
d. Any other natural person who ultimately controls the association or the foundation, by any means whatsoever.
- The Registry of the beneficial owners of associations and foundations
The new changes of the Government Ordinance 26/2000 bring by the obligation for the associations and the foundations to communicate to The Ministry of Justice, by means of an authenticated declaration, the identification data of the beneficial owner, pursuant to the following timetable:
a. Upon registration in the Registry of associations and foundations;
b. Yearly, before January 15th
c. Within the 30 days following the date when the identification data of the beneficial owner are subject to any change;
The information on the beneficial owner of the associations or foundations is to be recorded in a central Registry to be held by the Ministry of Justice on associations and foundations. The set up and operation of the Registry must be regulated by the Ministry of Justice within the 120 days from the entry into force of the law.
- Sanctions
Just as in the case of companies, any failure by the association or the foundation to observe the obligation to communicate the declaration on the beneficial owner is an offence punishable by a penalty amounting to between LEI 200 and LEI 5,000.
In certain situations, such failure may also entail the dissolution of the association or of the foundation.
These entities are also allowed to regularise their situation and submit the declaration on the identification details of the beneficial owner within 30 days from the date of the contravention sanction.
CONCLUSIONS
Both in the case of companies but also associations & foundations, the law only provides the elements to be included in the declaration on the identification of the beneficial owner. The legal provisions do not establish the checking procedure on the content of the declaration. Taking into account that the declaration is to be passed either in front of the notary or in front the Trade Registry’s Officer (this means that the notary and / or the Trade Registry’s Officer are allowed to ask for supporting documentation on the share capital in order to identify the beneficial owner). We shall see if other normative acts on the checking of the content of the declaration shall follow.