How compliant are EU Member States and EEA countries in UBO registration?
27/07/22
By 10 January 2020, every country within the European Union (EU) and the European Economic Area (EEA) had to implement the UBO registration for companies, other legal entities and trusts. Not every country had met the implementation deadline, but in March 2022 at least 25 EU Member States and EEA countries had an active UBO register for legal entities, following from this PwC research. Now after the implementation, not all legal entities have met the registration obligation. For some, this could be linked to the concerns regarding the protection of the right to privacy. While European regulation at first required a partially closed register, it later made the register public. Also, entities could be awaiting the outcome of the Sovim case (C-601/20) and WM case (C-37/20), in which the Court of Justice will rule on whether the public nature of the UBO-register is lawful.
In this PwC Tax News article, we provide an overview of the available information regarding the registration compliance in different EU Member States and EEA countries. It also provides information regarding possible imposed sanctions for entities that have failed to meet the registration obligation.
The UBO Registration obligation
All EU Member States and EEA countries (Norway, Iceland, Liechtenstein) had to introduce a public UBO register for companies and other legal entities by 10 January 2020 and a private UBO register for trusts and similar legal arrangements by 10 March 2020. This obligation stems from the Fourth and Fifth Anti-Money Laundering Directive. The UBO registration has been implemented differently in each country. In April 2022, the Tax Knowledge Centre of PwC the Netherlands published this publication regarding these differences.
The CJEU Judgement Sovim and WM
In the coming months, the EU Court of Justice (CJEU) is expected to publish its judgement in the Sovim case (C-601/20) and WM case (C-37/20). In this judgement, it will clarify whether or not the public part of the UBO registration is in line with the EU fundamental right of privacy. The result of this judgement may have consequences for UBO registrations in EU Member States and EEA countries. Once the judgement is published, we will update you with an extra PwC Tax News article.
UBO registration compliance
The debate surrounding the possible breach of the fundamental right of privacy by the UBO register also has the consequence that not every legal entity has registered its UBO in the national registers. A failure to comply with the registration obligation may result in sanctions by EU Member States and EEA countries. In this visual, we have provided insights regarding the registration compliance percentages of various EU Member States and EEA countries. You can also find information about the possible imposed sanctions for entities that have failed to meet the registration obligation in different EU Member States and EEA countries.
Five EU Member States have available information regarding the registration compliance percentage. In four of those Member States (Belgium, Gibraltar, Ireland and Luxembourg) the compliance percentage lies above 85%. Only in The Netherlands, the compliance percentage is 64%. Furthermore, various EU Member States and EEA countries have already issued sanctions on entities that have failed to meet the registration obligation. All known sanctions as of yet concern fines, ranging from EUR 500 to EUR 2.500.
What does this mean for your organisation?
If your organisation operates in several EU/EEA countries, you may have to deal with a UBO registration in different countries. It is therefore imperative that you have an overview of important aspects of UBO registration obligation in these countries. PwC can assist you in this, also with the help of the UBO Analyser and the input from our broad European network.
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