On 19 December 2024, the Luxembourg Parliament adopted bill of law 7961 (Law), amending the law of 13 January 2019 establishing a register of beneficial owners (RBE Law) and the law of 19 December 2002 on the trade and companies register and the accounting and annual accounts of companies (RCS Law).
Overview
The Law introduces several changes aimed at enhancing overall and timely compliance with the RCS and RBE Laws, and also clarifies the relevant access rights to the register of beneficial owners (RBE). It will enter into force on the first day of the month following its publication in the Luxembourg Official Journal.
Context and Timeline
The Law targets three key objectives regarding the RCS Law:
- Refine the text to better align with current practices.
- Enhance the quality of information filed with the RCS.
- Enable the RCS manager to ensure that the information filed by registered entities is up-to-date. To this end, the RCS manager is granted a range of administrative powers to ensure effective monitoring.
The initial objective of the Law was to implement some remaining requirements under the 5th Anti-Money Laundering Directive (AMLD V), (including the interconnection of European beneficial ownership registers systems via a central European platform) and equip the manager of the RBE with the necessary legal means to ensure the RBE is kept up to date. As such, the Law gives the manager of the RBE a controlling role in relation to RBE filings and vests the manager with the right to impose administrative sanctions.
Following the ruling of the Court of Justice of the EU (CJEU) of 22 November 2022, which invalidated the public access feature of the RBE, further amendments became necessary to ensure that access to the RBE is restricted to specific categories of persons and entities.
Key Changes to the RBE Law
Administrative Sanctions
The revised Article 9 introduces a more efficient enforcement process through, in particular, administrative sanctions and measures.
These sanctions now include the possibility for the manager of the RBE to:
- Order a public notice that a verification procedure is being launched against a particular entity (Name and shame).
- Issue certificates of non-compliance with the RBE Law for the entity concerned.
- Impose daily penalties on the entity concerned.
- Remove the entity’s registration from the RBE, without this entailing dissolution or loss of legal personality for the entity, thus effectively depriving it of an RBE registration.
These administrative penalties will co-exist with the existing criminal sanctions, some of which the Law now provides may only be imposed if the violation was committed knowingly.
Additionally, the Law gives the entity concerned the opportunity to appeal to the administrative courts against any such decisions made by the manager of the RBE.
Access to the RBE and legitimate interest
The Law also comprehensively amends Article 11 of the RBE Law in order to comply with the CJEU ruling and introduce provisions concerning legitimate interest in accessing beneficial ownership information. These amendments ensure that access is also granted to those who can justify a legitimate interest in the context of anti-money laundering and countering the financing of terrorism (AML/CFT).
The Law details the categories of persons and entities with a legitimate interest in accessing the RBE. These expressly include:
- Professional journalists: defined by the amended law of 8 June 2004 on freedom of expression in the media, including those established in EU Member States.
- Non-profit organisations: associations and foundations established within the EU and focused on AML/CFT.
- Individuals: those seeking to identify beneficial owners of entities they may transact with, to avoid links to money laundering or terrorist financing.
- National authorities/administrations: involved in AML/CFT, provided they do not already have access to the RBE under other provisions.
Key changes to the RCS Law
The main amendments to the RCS Law include:
- Requirement to provide personal identification information, including the Luxembourg national identification number (LNIN) and gender, for any natural person registered in the file of an entity with the RCS.
- Registration obligation for reserved alternative investment funds (RAIFs) that are not a commercial company, a special limited partnership, or a common fund.
- Requirement to record information about the manager when registering a RAIF with the RCS.
- Provision of an email address, if applicable, when registering a natural person or entity with the RCS.
- Registration requirement for Luxembourg branches of individual traders established in Luxembourg or abroad.
- Standardisation of identification information to be provided to the RCS when registering a natural person or an entity.
- Interconnection between the databases of the RCS and the RBE to streamline administrative processes, thus enhancing efficiency and data integrity.
- Obligation for the RCS manager to verify existing registrations and information filed with the RCS against other national registers to ensure consistency and accuracy. This includes actively monitoring registered information and requesting supporting documents when necessary.
- Responsibility for the RCS manager to collect statistical information and monitor the data filed with the RCS for adequacy, accuracy, and up-to-date status.
- New tools for the RCS manager to monitor and ensure compliance by registered entities, including improving support for entities and applying either incentive or coercive measures to ensure records are updated, with the option to report serious cases to the Public Prosecutor.
