Simplified procedure for declaring real beneficiaries

3. August 2020 | Reading Time: 2 Min

Law no. 108/2020, which introduces a series of exemptions from the obligation to declare real beneficiaries for certain categories of persons, came into force on 9 July 2020.

As a result, legal persons will now no longer be required to submit a declaration regarding their real beneficiaries, except upon incorporation or whenever a change occurs (within 15 days of the date on which this event occurred). With 2020 being the first year in which it is mandatory to declare real beneficiaries, for the current year companies have until 1 November 2020 to submit the relevant declarations.

Law no. 108/2020 also introduces some other important changes, as follows:

  1. Companies with associates/shareholders comprised exclusively of natural persons are no longer required to submit a declaration regarding their real beneficiaries if they themselves are the sole real beneficiaries. Where this is the case, in the absence of a declaration regarding their real beneficiaries, the National Office of the Trade Register will complete ex officio the register of real beneficiaries of companies based on the information contained in the documents accompanying the company registration application or in the records held for companies that are already registered.
  2. Reporting entities as defined under Law no. 129/2019 (lawyers, auditors, chartered accountants and certain traders with transactions worth more than EUR 10,000) must obtain additional information about their business partners proving that the latter have declared their real beneficiaries, or information from the records of the real beneficiaries, whenever they embark on a new business relationship with persons subject to the obligation to register information regarding their real beneficiaries.
  3. Information about real beneficiaries may be obtained from the records of real beneficiaries by any person without demonstrating a legitimate interest.
  4. Companies that sell goods and perform cash transactions with a value of more than 10,000 euros must designate a person as responsible for fulfilling the obligations provided for under Law no. 129/2019.
  5. The National Office for the Prevention and Combating of Money Laundering may also investigate any suspicious money laundering transactions ex officio.
  6. Cryptocurrency-related service providers are required to identify suspicious transactions and report them to the authorities.
  7. Declarations regarding real beneficiaries can be submitted as of now, including remotely, i.e. by post, courier or online using an electronic signature.

However, Law 108/2020 did not introduce any changes with respect to the reporting obligations for associations and foundations regarding their real beneficiaries. Consequently, NGOs still need to submit annual declarations regarding their real beneficiaries, even if they are made up exclusively of physical persons.

In the case of associations, it is stated that the real beneficiary is the category of natural persons or, as the case may be, the natural persons in whose main interest they were established, or, in the case of foundations, the category of natural persons in whose main interest they were established.

Source: Law no. 108/2020 amending and supplementing Law no. 129/2019 on the prevention and combating of money laundering and terrorist financing, as well amending and supplementing various normative acts, as published in the Official Gazette no. 588 on 6 July 2020.

Tax & Legal Newsletter July 2020