Following numerous recommendations from the Committee of Experts on the Evaluation of Anti – Money Laundering Measures and the Financing of Terrorism – MONEYVAL– of the Council of Europe with regard to the establishment of a centralized register, the Albanian Parliament has enacted Law 112/2020 “On the Register of Beneficial Owners (the “UBO Law”), effective as of August 29th, 2020.
This newsletter provides for an overview on the setting up of the Register of Beneficial Owners (“RBO”) and on certain practical aspects.
What is the register of beneficial owners ("RBO")?
The RBO consists of an electronic database held by the National Business Center (“NBC”) which contains data on the beneficial owners of the reporting entities identified by UBO Law.
The RBO should be established no later than January 31st, 2021.
Who is identified as a beneficial owner?
According to the UBO Law, a beneficial owner is:
- in case of corporate entities, an individual, who ultimately owns or controls a legal entity through direct or indirect ownership of a sufficient percentage of the shares or voting rights or ownership interest in the reporting entity, including through bearer shareholdings, or through control of other means, or benefits from the transactions performed by the entity on his/her behalf.
Direct ownership is defined as the ownership held by one individual of at least 25% of the shares/quotas or interest in a reporting entity.
Indirect ownership is the ownership or control exercised by the same individual, in one or more legal entities, which, individually or combined, own at least 25% of the shares/quotas or interest in a reporting entity.
- in case of an NGO and the branches thereof, the founder, the legal representative or the individual exercising the ultimate effective control in the management thereof.
Ultimate effective control is defined as the power of the individual to determine the decision-making of the NGO or control in any way, the election, appointment or dismissal of the decision-making bodies of the NGO.
- In case of a trust, the settlor, the trustee, the protector (if any), and the beneficiaries, or where the individuals benefiting from the trust have yet to be determined, the class of persons in whose main interest the entity is set up or operates, as well as any other individual exercising ultimate control on the trust, by way of direct or indirect ownership or by other means.
What information on the UBO will be reported to the RBO?
The set of data that should be reported to the RBO regarding the beneficial owner (s) are the following: (i) name and surname, (ii) personal identification number, (iii) date of birth, (iv) citizenship, (v) address of permanent residence, (vi) passport number (applicable for foreign citizens), (vii) date of determination of the individual as beneficial owner and (viii) the percentage of ownership and if the ownership is direct or indirect.
What companies are required to register their UBOs?
The obligation to submit information about their beneficial owner (s) to the RBO apply to all legal entities established under the laws of the Republic of Albania, including but not limited to joint stock companies, limited liability companies, NGOs, branches and representative offices of the foreign companies.
The reporting entities shall be obliged to provide information to the RBO on their beneficial owner (s):
- in case of new entities, within 30 days from the establishment date;
- In case of already existing entities, within 60 days after the establishment of the RBO;
- In case of an already submitted information, the update to the RBO should be provided within 30 days from the change of information.
What are the sanctions for not registering a UBO?
In case of non – compliance with the registration – related obligations within the aforementioned deadlines, the reporting entity is punishable by a fine amounting from ALL 250,000 (approx. EUR 2,000) to ALL 500,000 (approx. EUR 4,000).
In case of repetitive violation, the amount of the above fines is doubled.
Furthermore, the failure to keep and regularly update the company’s internal records regarding its UBO’s is punishable by a fine of ALL 50,000 (approx. EUR 400).
In addition to the fine imposed to the reporting entity, the legal representative of the latter shall be punished with a fine of ALL 150,000 (approx. EUR 1,200).
The identification of the UBO is not always a straightforward process. In light of the introduction of the UBO registry in Albania, EY Albania Law Team can assist you with making sure that you are compliant with the requirements arising from the recently adopted UBO Law, and more specifically with the following:
- Identification of your company’s UBO (s);
- Filings with the NBC (performance of both the initial registration and subsequent updates of the data of the UBO (s));
- Representation during administrative and court proceedings with regard to UBO – related issues;
- Setting up an internal procedure on the registration requirements, timelines, required documents for your company; and
- Any other legal queries that you may have.
