Reported by Moody’s

In the United Kingdom, there are beneficial ownership registers for companies, properties, land, and trusts. In February 2022, the UK Government sought to increase the accuracy of some of these registers and in March 2022 introduced new legislation around overseas entities owning property in the UK. According to the UK Government, “The new Register of Overseas Entities is held by Companies House and requires overseas entities that own land or property in the UK to declare their beneficial owners and/or managing officers. There will be severe sanctions for those who do not comply, including restrictions on buying, selling, transferring, leasing, or charging their land or property in the UK.”

A non-public register for UBO of trusts was also introduced in the UK in 2017 and plans to expand this were tabled last year.

In March 2024, key changes were proposed (currently still in draft) to the economic crime and corporate transparency Act (ECCTA) to add greater transparency to the incorporation of legal entities in the UK. Among the new requirements are enhanced powers for Companies House to challenge information being submitted if incorrect. It will be required to pass electronic verification checks for persons of significant control, directors, and other relevant parties. 

In the European Union, member states were required to introduce public companybeneficial ownership registersby January 2020. Following a ruling by the European Court of Justice in November 2022 and recent updates on regulation in June 2024, public access to these UBO registers has been removed. The European Commission continues to work with “competent authorities and obliged entities” to access the registers i.e., those authorized to access UBO information due to legitimate interest in preventing anti-money laundering and counter-terrorist financing.

Another significant change within the EU relates to UBO thresholds, which look set to be significantly reduced as part of the new AML regulations. The general threshold remains at 25% including direct and indirect interest and control rights. For higher risk sectors (yet to be defined), member states can now request lower thresholds, established at 15%.

In the US, a reporting company will be required to provide information about itself and each of its beneficial owners: name, birthdate, address, and a unique identifying number and issuing jurisdiction from an ID.

The US CTA defines a beneficial owner as any individual who, directly or indirectly, either

• exercises substantial control over a reporting company, or 
• owns or controls at least 25% of the ownership interests of a reporting company. The rule defines the terms “substantial control” and “ownership interest.”   

As of January 2024, The US’ Financial Crimes Enforcement Network (FinCEN) has established a database to house beneficial ownership information as called for in the Corporate Transparency Act (CTA). Access, as authorized in the CTA, is limited to Federal agencies; state, local, tribal, and foreign governments; and financial institutions. 

In the UAE (United Arab Emirates), a resolution (Cabinet Resolution No. [58] of 2020) regulating UBO procedures took effect in 2020. All entities in the UAE were required to provide data on ultimate beneficial owners by June 2021.

In Australia, there is currently no law or regulation requiring legal entities –other than those with existing anti-money laundering (AML) obligations– to maintain information on UBOs.

Singapore-registered companies have been required to maintain a Register of Registrable Controllers (RORC) since 2017. This is made available to the Accounting and Corporate Regulatory Authority (ACRA) on request. Anti-money laundering laws and cross-border controls continue to be stepped up worldwide. The EU, for instance, has introduced AMLA (AML Authority) – an anti-money laundering authority that will play a significant role as a unified supervisory body. Among other powers, AML will establish a central AML/CFT database to collect information from other supervisory authorities and develop and implement regulatory standards and guidance. It is hoped that this authority, due to be enforced in 2024, and other cross-border regulation will make a significant difference in the fight against financial crime. 

Read full report: https://www.moodys.com/web/en/us/kyc/resources/insights/ubos-what-they-are-disclosure-requirements-data-challenge.html