Thanks to Giuseppe Nigro for collaborating on this article
Increasingly, identifying the beneficial owner of a company, legal entity, or trust is perceived as a fundamental requirement in order to circumscribe as best as possible the phenomena of money laundering and terrorism financing. Following the adoption of the fifth and sixth AML Directives, in 2019 the European Commission issued a communication accompanied by a series of reports that built the basis for further discussions on the improvement of the AML framework.
Within this context, the pursuit of prevention and transparency objectives at the European level has resulted, most recently, in the adoption of Implementing Regulation No. 369/2021 on March 1, 2021. With this regulation, the European Commission introduced technical specifications and procedures to implement—as of March 22, 2021—the Beneficial Ownership Registers Interconnection System (“BORIS”), which enables the interconnection at a decentralized level of the registers of beneficial owners established by Member States in accordance with EU Directive No. 2015/849.
The BORIS system operates similarly to the Business Registers Interconnection System (“BRIS”), since the central national beneficial ownership registers are interconnected with the European e-Justice Portal through the European Central Platform, previously established by EU Directive No. 2017/1132.
Nevertheless, it was necessary to issue a specific implementing regulation because of the differences between the two sets of interconnected registers. Indeed, section (1) of the premises of the recent implementing regulation set forth that “the differences between the purpose, scope and content of the registers interconnected under EU Directive no. 2017/1132 and the central beneficial ownership registers established under EU Directive no. 2015/849 necessitate defining and adopting further technical specifications, measures and other requirements that ensure uniform conditions for the implementation of the system.”
With regard to the entities that may access information on beneficial ownership, the regulation, referring to EU Directive No. 2015/849, quotes the notion of a “qualified user,” a category that includes:
- (a) competent authorities and FIUs (Financial Intelligence Units), without any restrictions;
- (b) obligated entities, within the framework of customer due diligence.
To access the information entered into the BORIS system, users must use a national registration number and a company registration number, if different from the national registration number.
After setting out the communication methods and protocols and the security standards for the communication and distribution of information, the regulation goes on to list the data to be exchanged in the framework of the BORIS, defining each set of information in the national registers a “BO record.” The BO record of a corporate or other legal entity, or a trust or a similar type of legal arrangement, includes data on the profile of the entity or arrangement concerned (including its name, legal form, registration address, and national registration number) and on its beneficial owner, as well as on the beneficial interest held by that owner.
The minimum mandatory information to be communicated to the central national beneficial ownership registers consists of the name, month and year of birth, country of residence, and nationality of the beneficial owner, as well as the nature and extent of the beneficial interest held.
This set of information may be expanded by a Member State, as each may decide to share additional information through BORIS, including the date of birth of or contact information for the beneficial owner.
Finally, in order to make the content of the registers uniform and allow for better interaction, the regulation has unified the services to be provided by each register and their interfaces and harmonized search criteria.
In particular, the search criteria provided by the portal are the following:
- with regard to the companies or other legal entities, trusts, or similar arrangements:
- Name of the legal entity or arrangement;
- National registration number;
- with regard to persons as beneficial owners:
- First name and surname of the beneficial owner;
- Date of birth of the beneficial owner.
The functioning of the BORIS system presupposes that all Member States have already adopted national central beneficial ownership registers, but Italy and Hungary have not yet done so.
Indeed, although the Italian register should be legally in force, it has not yet been implemented, as the implementing decree of the Italian Ministry of the Treasury and the Italian Ministry of Economic Development, despite having received a favorable opinion from the Data Protection Authority, has not yet been issued. In this regard, on March 19, 2021, the Council of State suspended its opinion on the draft implementing decree in order to seek further clarification and assessment from the relevant ministries.