Identifying the real beneficiary of the companies regulated by Law no. 31/1990 and other obligations of these companies from the perspective of prevention and combating money laundering and terrorism financing
Identifying the real beneficiary of trading companies
Law no. 129/2019 on prevention and combating money laundering and terrorism financing, as well as for amending and supplementing certain enactments („Law 129/2019”) that entered into force on July 21, 2019, brought a series of amendments to the previous legislation in this field.
One of such amendments refers to the obligation of the companies, established on the ground of Law no. 31/1990, to identify and to provide information regarding the real beneficiary thereof.
According to Law 129/2019, real beneficiary means any natural person finally holding or controlling the client and/or the natural person on whose behalf is performed a transaction, an act or an activity.
In case of companies regulated by Law no. 31/1990, the concept of real beneficiary includes, among others: the natural person or persons finally holding or controlling the legal person by exercising the ownership right, directly or indirectly, upon a number of shares or voting rights big enough to ensure the control, or by participation to the legal person’s capital, or by exercising the control by other means (this criterion is deemed to be fulfilled when holding at least 25% of the shares plus one share or the participation to the legal person’s capital in a percentage of more than 25%).
In the event that, no natural person is identified, further to using all possible means and to the extent that no reason of suspicion exists, according to the above mentioned criterion or if there is any doubt that the identified person is the real beneficiary, then the real beneficiary, according to the meaning of the law, is the natural person or persons ensuring the management of the company.
As per art. 56 of Law 129/2019, the companies registered within the Trade Registry are compelled to submit on a yearly basis, or each time a change occur, a statement regarding the real beneficiary of the company, in view of registering the real beneficiary with the Registry of Real Beneficiaries of Companies. The yearly statement must be submitted to the Trade Registry where the company is registered within 15 days as of approval of the yearly financial statements and the statement for the amendment of identification details of the real beneficiary must be submitted within 15 days as of the date when such change occurred. The statement may be submitted in notarized form (i.e. to be signed before a notary public) or it may be signed directly before the representative of the Trade Registry.
For the companies registered with the Trade Registry prior to the date when Law 129/2019 entered into force (i.e. July 21, 2019), the deadline for submitting the statement on the identification details of the real beneficiary is 12 months as of this date.
Breach by the company’s legal representative of the obligation to submit the statement regarding the real beneficiary represents administrative offence and is sanctioned with fine ranging between RON 5,000 and RON 10,000 (Roughly between EUR 1,050 and EUR 2,100). If the company, through its legal representative, does not comply with the obligation to submit the statement within 30 days as of the date when the administrative offence was applied, the National Office of the Trade Registry shall request to the competent court the company’s dissolution. The court could decide the company’s dissolution if the company does not remove such irregularity prior to plead on the merits.
Moreover, as per art. 19 of Law 129/2019, private legal entities registered on Romanian territory are compelled to obtain and hold adequate, accurate and updated information regarding their real beneficiary, including with regard to the modality through which this capacity is materialized and to present them to the control and supervisory authorities, upon their request.
The sanction for breaching this provision is warning or fine ranging between RON 25,000 and RON 150,000 (Roughly between EUR 5,230 and EUR 31,380) and in case of legal entities, the maximum level of fine is increased with 10% as of the total incomes reported to the fiscal period that is closed, prior to the date when the minutes for ascertaining and sanctioning the administrative offence has been drafted. The sanctions and measures can be applied to the management’ members and to the natural persons responsible for breaching the law.
Moreover, for breaching the provisions of Law 129/2019, aside to the administrative fine, one or more supplementary sanctions provided by the law can be applied (e.g. suspension of the activity between one month to 6 months, blocking the bank account between 10 days to one month, shutting down the branch office or other secondary office, etc.).
In addition to the obligation to declare the real beneficiary, the companies have other important obligations, such as: (i) obligation to report to the National Office for Prevention and Combating Money Laundering (“Office”) transactions in cash above the minimum level of the equivalent in RON of EURO 10,000, irrespective if the transaction is executed by a single act or by more acts connected to each other, (ii) the obligation to report to the Office transactions defined by the law as being suspect, (iii) the obligation to implement and apply measures of knowing the clientele, (iv) obligation of keeping the documents and records obtained when applying the measures for knowing the clientele, etc.