Issue link: https://maltatoday.uberflip.com/i/981272
| SUNDAY • 13 MAY 2018 maltatoday B5 BUSINESS ta for both public and private companies. UBO registers could be a real opportunity for Financial Services to simplify the CDD process – providing a valu- able data source for a host of organisations required to carry out detailed customer checks. This could even be a first step towards providing central KYC utilities – with governments investing in the compliance process, rather than businesses carrying the full cost of AML. But in the current regulatory climate, organisations need to be 100% sure that they can rely on what is held in the registers without any increased risk. What is to guarantee that these registers will actually have accurate in- formation within them? The legislator has sought to ensure that each company's information is kept up to date and as accurate as possible. As previously stated, the regula- tions impose obligations on companies to hold up to date information at their regis- tered office and make a filing to the registry of companies on an annual basis. In the case of a change in sharehold- ing, a company must submit a form confirming whether such change in shareholding will result in a change in the ultimate beneficial owner- ship. In this aspect, the MFSA may impose daily penalties on companies that fail to comply with such regulations. Such a measure is aimed at encourag- ing compliance with these reg- ulations and ensuring that the information provided remains accurate. Additionally, as from 1 January 2018, all companies wishing to be registered or re-domiciled into Malta are required to submit a form identifying each ultimate ben- eficial owner of the company and the nature and extent of the beneficial interest held. The form is to be submitted at incorporation stage along with the draft Memorandum and Articles of Association of the Company. The regula- tions stipulate that the Reg- istrar of Companies shall not approve the registration of the Company unless he is sat- isfied that the requirements under such regulations have been complied with. The MFSA has also been granted the power to issue ad- ministrative penalties ranging up to €5,000 on any company officer, shareholder or ben- eficial owner who knowingly supplies false or misleading information to the MFSA in pursuance of the obligations under these regulations. Such an offence may also lead to im- prisonment for a term not ex- ceeding six months. How will the data be accessed and by whom? The new regulations specify that access to such a register shall be granted to national competent authorities such as the MFSA and the Malta Gaming Authority as well as the FIAU and the national tax authorities. In certain instanc- es, access may also be granted to other competent authori- ties within Malta such as the Comptroller of Customs when carrying out duties relating to the cross-border movement of cash and other financial instru- ments. In addition, accessibility shall also be granted to "subject per- sons" for the purpose of carry- ing out customer due diligence. The term "subject persons" in this context refers to any per- son that is engaging in licens- able activity such as the busi- ness of banking, investment services, insurance business and fund administration ser- vices. The data will be accessed by registration via an online platform and information shall be requested against payment. Crucially, any person or or- ganisation may request access to the name, date of birth, country of residence and ex- tent of beneficial interest held by the beneficial owners of a Company if a "legitimate in- terest" is demonstrated. Such a "legitimate interest" is fur- ther defined as the satisfac- tory demonstration that the information requested shall be crucial in combatting money laundering or the financing of terrorism. The final decision in this re- gard rests with the Registrar of Companies who is to deter- mine each request on a case by case basis. Access shall be granted on the basis of the ap- plicant's track record and by means of relevant documen- tary evidence. This Q&A is not intended and does not purport to give any sort of legal, tax or financial advice. luke.mizzi@mamotcv.com