In a recent communication, the Public Prosecutors’ Offices of Luxembourg and Diekirch announced that the Grand Ducal Police, working in close coordination with their offices, will carry out systematic checks in the coming weeks across Luxembourg’s territory to verify compliance with the Luxembourg law of 13 January 2019 establishing the register of beneficial owners (Registre des bénéficiaires effectifs), as amended (the “RBE” and the “RBE Law”).
This announcement is an important reminder for entities within the scope of the RBE Law to ensure that their beneficial ownership information is accurate, up to date and properly documented. That information must not only be filed with the RBE but must also be available at the entity’s registered office together with the supporting documentation used to identify the beneficial owners.
It is therefore important for in-scope entities to ensure that (i) all information relating to the beneficial owners of their entity is accurate, up to date, (ii) available at their registered office, together with the relevant supporting documentation, and (iii) filed with the RBE so as to avoid administrative and/or criminal sanctions.
Key Obligations under the RBE Law
Under the RBE Law, in-scope entities must:
- identify their beneficial owners, i.e. the natural persons who ultimately own or control the entity, directly or indirectly, or on whose behalf a transaction or activity is carried out;
- file and register the relevant information with the RBE within one month after becoming aware of it (whether upon initial registration or following a change); and
- obtain and retain, at their registered office, up-to-date beneficial ownership information together with the relevant supporting documents and ensure that any changes are reflected without delay.
Focus of the upcoming verifications
- the information recorded in the RBE matches the entity’s actual ownership and control structure; and
- a complete and current beneficial ownership file is kept at the registered office.
Non-compliance may expose both the entity and its managers to administrative and/or criminal sanctions. Failure to comply with the RBE Law may lead to fines ranging from EUR 1,250 to EUR 1,250,000.
Practical steps to take now
In order to prepare adequately for a possible verification, we recommend that in-scope entities:
- review their current RBE extract and seek confirmation that no recent change has been omitted (e.g. a change of address of a beneficial owner, a share transfer or a change in governance);
- ensure that the beneficial ownership file and all supporting documents are centralised and retained at the entity’s registered office (i.e. up-to-date, accurate and complete); and
- ensure that any relevant staff, management or service provider, especially in the case of a domiciliation (e.g. a reception desk or administrative staff, the relevant personnel) knows (i) that a verification may take place, (ii) who is the designated person to contact, and (iii) where the RBE documentation is located.
Should you have any questions on the above, please do not hesitate to contact one of our experts of the regulatory team.
