Citco’s Global Solution for Maintenance of UBO Registers

The legal regulations on the disclosure of the Ultimate Beneficial Owner (UBO) continue to be introduced globally. In spring 2019, we highlighted that over 25 countries in Europe had followed the 4th EU Anti Money-Laundering Directive and implemented UBO reporting requirements in domestic legislation (Erikas Sareika “UBO reporting requirements in Europe”, GSGS Focus, Spring 2019).

In Europe today, only a handful of countries without UBO disclosure requirements remain. Similar disclosure regulations have also been implemented in various countries around the world including; Brazil, Canada, China, India, Indonesia, Tunisia, Philippines, Taiwan and the UAE. In total around 70 countries worldwide require identification and keeping accurate information about companies’ beneficial ownership.

Although the main purpose of UBO reporting is to ensure transparency of a legal entity’s beneficial ownership, relevant countries implement the legal regulations in different ways. Since multinational corporations do not usually have a natural UBO who holds a certain number of shares (typically 20-25% or more), the body to register will instead differ according to the jurisdiction.

In the absence of a natural UBO, countries define the UBO very differently. In the majority of EU countries, as well as Qatar, Mauritius and the Dominican Republic, the UBO for subsidiaries of multinationals is treated as the management of the entity. In Portugal, it’s the management of the holding company; a shareholding company in Lebanon and Hong Kong; and the directors and shareholders in Taiwan.

In addition to this, many countries have very specific forms that need to be filed during a certain period. At the moment, 16 jurisdictions have precise requirements for the annual review of the UBO registers. The rest require companies to obtain, hold and register – where necessary – adequate, accurate and current information on the UBO (as per local definition of the UBO). In any case, the requirements must be taken seriously given the potentially significant penalties (over EUR 1 million and prison sentences up to 5 years) that might be applied.

Such tendencies, and the ever-changing legal environment, often result in multinational clients feeling uncertain about the compliance of all subsidiaries worldwide. Citco Global Subsidiary Governance Services (GSGS) therefore offers a smart solution for multinational clients.

The confidence that each subsidiary has the accurate and up-to-date information on the UBO (as per local definition of the UBO) can be achieved by creating and maintaining UBO internal registers in all jurisdictions, where the re-identification of the UBO has been implemented in local regulations. In order to be fully compliant and confident that all subsidiaries are in a good standing, ready for any possible inspection, Citco:

  • Informs about relevant new regulations;
  • Provides updates on further developments of such regulations;
  • Prepares internal UBO registers;
  • Assists with relevant filings with local authorities;
  • Maintains, updates and conducts an annual review of UBO registers.

This is in order to stay on top of these obligations, ensure compliance for each legal entity that falls under UBO disclosure requirements and have accurate and up-to-date information.

The reported particulars of the UBOs differ from general to very precise (especially where the directors, management, board are treated as UBOs of the subsidiary). The created UBO registers contain all necessary UBO information as required in a particular jurisdiction (examples including date of birth, passport number, residential address and nature of ownership). Citco works proactively to contact clients, in order to check if any data has changed.

For more information about the Citco GSGS service “Maintenance and annual review of Ultimate Beneficial Owner (UBO) registers” please contact GSGS_ExpertsUBO@citco.com.

Jurate Kisieliene, Client Servicing Manager, Citco Global Subsidiary Governance Services
Citco GSGS Focus – Summer 2020