Penalties for failing to comply with UBO registration.

Lauren PolsAntwerp, Belgium

The Act of 18 September 2017 on the prevention of money laundering and terrorist financing and on the restriction of the use of cash, better known as the Anti-Money Laundering Act, may at first glance seem far removed from the daily reality of most entrepreneurs. In reality, nothing could be further from the truth. Companies, non-profit organizations (vzw’s) and foundations are also subject to this Act and should keep several of its provisions in mind.

For instance, companies, non-profit organizations (vzw’s) and foundations are required to register, among other things, who their ultimate beneficial owners are. This person (or persons) is the natural person for whose benefit a transaction is carried out. To qualify as the ultimate beneficial owner of a company, this person must hold at least 25% of the shares or voting rights of the company. The situation is different for non-profit organizations or foundations. There, all directors of the non-profit organization or foundation are deemed to be the ultimate beneficial owner (or UBO).

The Act set 31 December 2019 as the final deadline by which companies were required to register their ultimate beneficial owners. Many entrepreneurs have not yet done so, as a result of which they may have received a reminder letter from the tax authorities. Upon receiving such a reminder letter, high priority should be given to addressing the matter. If this obligation is not fulfilled, companies risk a fine ranging from 250 to 50,000 euros.

In addition, companies must provide supporting documents confirming the accuracy of the ultimate beneficial owners.

To date, no fines have yet been issued, but this is about to change. The tax authorities have announced that, starting 1 September 2021, they will issue fines to companies that fail to comply with their obligations under the Anti-Money Laundering Act.

Would you like more information about your obligations under the Anti-Money Laundering Act? → Feel free to contact us without obligation at contact@alisadvocaten.be

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