By the deadline of 11 December 2023, all corporations, private legal entities, trusts and trust-like legal entities will have to communicate to the territorially competent Chamber of Commerce the data and information relating to their “beneficial owners”.
The notion of “beneficial owner” has become part of our legal system driven by anti-money laundering laws and its typical demands to disclose the real identity of the person who benefits from the effects of a transaction. Indeed, finding precise information on the “beneficial owner” is particularly useful to detect possible illicit uses of the economic system by those who, by hiding behind fiduciary interpositions or particularly opaque structures, would like to conceal their identity to carry out money laundering transactions or the financing of terrorist organizations.
For these reasons, both European and domestic legislation have been paying considerable attention to the “beneficial owner”.
European anti-money laundering efforts date back to the early 1990s and have been reflected over time in five Directives.
The Fourth EU Directive/2015/849 and the Fifth EU Directive/2018/843 strengthened the Member States’ prevention system of the Member States, in line with the lines drawn by the 2012 FATF (Financial Action Task Force) Recommendations, emphasizing the risk-based approach that is considered fundamental for the graduation of preventive measures and controls. The implementation of the Fourth and Fifth Directives into Italian national law took place through two legislative decrees: no. 90 of 25 May 2017 and no. 125 of 4 October 2019, which first fully replaced and then further amended the text of Legislative Decree no. 231 of 21 November 2007 (so-called Anti-Money Laundering Decree).
The identification of the “beneficial owner” must be carried out in accordance with the provisions of Article 20 of the Anti-Money Laundering Decree. Specifically, for corporations, the “beneficial owner” is: (i) the natural person who directly or indirectly owns more than 25% of the share capital. Ownership can be defined as indirect when the share is held through ”subsidiaries, trust companies or intermediaries”; (ii) the natural person who has control of the majority of the votes exercisable at the shareholders’ meeting; (iii) the natural person who has control of sufficient votes to exercise a dominant influence at the shareholders’ meeting (iv) the natural person who, due to particular contractual ties, is in a position to exercise a dominant influence in the shareholders’ meeting; (v) residually, if it is not possible to identify one or more “beneficial owners” by means of the first criteria, the “beneficial owner” must be identified in the natural person(s) holding powers of legal representation or management of the company.
The identification criteria referred to above are still the subject of extensive doctrinal debate and, therefore, their application requires particular attention.
In this regard, the supervised and accredited entities that consult the Register in support of anti-money laundering compliance (e.g. the banks with which the companies maintain current account relationships) must not limit themselves to identifying the “beneficial owner” on the basis of the mere information transmitted by the various entities required to report to the Companies Register; they must always proceed to verify, in the light of the information acquired during customer due diligence, that the “beneficial owner” as identified is the same of the one indicated in the Register of beneficial owners.
Basically, the Register of beneficial owners must be considered an ancillary tool aimed at guiding the obliged party in identifying the “beneficial owner” and not a tool aimed at replacing the obligations to identify the “beneficial owner”, as expressly indicated in Article 21, paragraph 7 of the Anti-Money Laundering Decree.
Article 21, paragraph 5 of the Anti-Money Laundering Decree, namely, provides that a specific Decree of the Ministry of Economy and Finance, in agreement with the Ministry of Economic Development (now the Ministry of Business and Made in Italy), after consultation with the Privacy Authority, shall lay down the provisions on the disclosure, access and consultation of data and information relating to the beneficial ownership of companies having legal personality, private legal persons, trusts producing legal effects relevant for tax purposes and legal institutions similar to trusts.
The implementing decree of the MEF (DM 55/2022) was issued on 11 March 2022. More recently, on 9 October 2023, the MIMIT Decree of 29 September 2023 was published in the Official Gazette (Gazzetta Ufficiale), by which the system of reporting data and information on beneficial ownership was finally made operational.
Accordingly, by the deadline of 11 December 2023, joint-stock companies, limited liability companies, companies partly limited by shares, cooperative societies, private legal entities, and trustees of trusts with tax-relevant legal effects or trust-like legal arrangements must make the disclosures of beneficial ownership data and information. Companies with legal personality and private legal persons, the incorporated after 9 October 2023, must make such disclosure within the shortest period of 30 days from the entry in their respective registers (or from the date of incorporation, in the case of trusts or trust-like mandates).
The communication must be made by means of a self-declaration to be transmitted electronically to the office of the Commercial Register of the competent Chamber of Commerce. The reporting obligation is fulfilled by the directors for companies having legal personality, by the founder (if still alive) or by those entrusted with the representation and management for private legal persons such as foundations and recognized associations, as well as by the trustees of trusts or similar legal institutions.
More specifically, the above-mentioned persons must: (i) access ‘DIRE’ (the Chamber of Commerce’s service for the compilation of telematic dossiers) or another market solution, provided that it is updated with the ministerial forms for the compilation and sending of dossiers; (ii) indicate the company or institution that is the subject of the communication and the data relating to the “beneficial owner”; (iii) digitally sign the dossier.
Failure to comply with the reporting obligations entails the imposition of an administrative sanction on each obliged party from a minimum of €103 to a maximum of €1,032.
DISCLAIMER: This newsletter merely provides general information and does not constitute legal advice of any kind from Macchi di Cellere Gangemi. The newsletter does not replace individual legal consultation. Macchi di Cellere Gangemi assumes no liability whatsoever for the content and correctness of the newsletter.