Beneficial ownership under EU law and Spanish law
1. Regulation under EU law.
The growing pressure on governments and companies to increase transparency and accountability has resulted in a global shift towards increased disclosure around beneficial ownership. With this regard in 2015 the EU adopted a new Anti-Money-Laundering Directive to regulate the business conducts and to fight tax evasion, money laundering and terrorist financing
For the purposes of the Fourth Anti-Money Laundering Directive, a beneficial owner is an individual or legal entity which ultimately owns or controls more than 25% of a company’s shares or voting rights or exercises control over the management of the company. As a minimum, the Beneficial Ownership Register for relevant companies in the EU must include the following information:
✓ Country of residence
✓ Month and year of birth
✓ Nature of control
✓ Size of interest.
The beneficial ownership registers for legal entities, such as companies, will be public. This wider access to part of the beneficial ownership information will enhance public scrutiny and will contribute to preventing the misuse of legal entities for money laundering and terrorist financing purposes.
The access to data on the beneficial owner of trusts will be accessible without any restrictions to competent authorities, Financial Intelligence Units, the professional sectors subject to Anti-Money laundering rules (banks, lawyers…) and will be accessible to other persons who can demonstrate a legitimate interest. In addition, when a trust is a beneficial owner of a company, access to this information can be requested via a written request.
It is currently optional for member states to make the beneficial ownership register publicly available, however the EC are currently considering an amendment to the Directive in the form of a fifth Directive which would make it mandatory for the register to be public.
2. Regulation under Spanish law.
As a member of the EU Spain implemented AML Directive to its legal system in 2010. Article 4 of Spanish Act ultimate beneficial owner is defined as the individual who directly or indirectly owns or controls (i) more than 25% of the share capital of the company; or (ii) has more than 25% of the voting rights of the company; or (iii) through other means exercises direct or indirect control of the management of the company.
The indirect beneficial owner is the natural person having an interest exceeding 25% in the company filing the annual accounts through intermediary entities that controls (either because the natural person has more than 50% or the majority of the voting rights or because he meets any of the requirements ruled out in the Spanish Commercial code on consolidated annual accounts)
Article 2 of the same article mentions the list of entities that this legislative shall apply to. And foundations and associations are also in the list. Practically the majority of entities will be required to include that information, except for the companies listed in a regulated market. Additionally, those companies that have an indirect UBO will need to disclose the information on the legal persons that intervene in the chain of control of the Spanish company. If a company does not have a direct or indirect UBO, it needs to identify in the form the members of its management body.
Foundations and associations are also under the scope of this act. For the purpose of the act foundations shall ensure that these are not used for money laundering or to channel funds or resources to individuals or entities linked to terrorist groups or organisations.
All foundations shall keep for records the period laid down in article 25 identifying all persons who contribute or receive gratis funds or resources from the foundation, under the terms of articles 3 and 4 of this Act. These records shall be made available to the relevant authorities.
The provisions of the previous subparagraphs shall also apply to associations and compliance with the provisions of this article shall correspond in such cases to the governing body or general assembly, to the members of the representative body that manages the interests of the association and to the body responsible for verifying its constitution.
On a risk-sensitive basis, the other obligations provided for in this Act may be extended to foundations and associations by the subsequent regulations.