Access to the UBO Register, and the sensitive information it may contain, is subject to a differentiated regime. Competent authorities, financial institutions, lawyers and others enjoy direct access for regulatory oversight or know-your-customer (“KYC”) purposes, while members of the general public may access UBO information only if they can demonstrate a legitimate interest.
Looking ahead, the EU AML package adopted on 30 May 2024 will reshape the AML framework again from 2027 onwards, introducing a harmonised framework for public access to UBO information.
Remind me, what is the UBO Register?
The UBO Register was introduced by the Belgian Act of 18 September 2017 on the prevention of money laundering and terrorist financing and on the restriction of the use of cash (the “AML Act”), implementing EU Directive 2015/849. It requires Belgian companies and other legal entities to obtain, maintain and regularly update adequate, accurate and current information on their ultimate beneficial owners (“UBOs”).
A UBO is the natural person who ultimately owns or controls an entity, or on whose behalf a transaction is carried out or a business relationship established. For each type of legal entity, the AML Act sets out a hierarchy of rules for determining its UBOs.
Information and supporting documents
For each UBO, the information that must be uploaded to the Belgian UBO Register is set out in Article 3 of the Royal Decree of 30 July 2018 on the operating procedures of the UBO Register (the “UBO Royal Decree”). This includes information such as the individual’s first and last name, date of birth, nationality, country of residence, full residential address, and either his/her Belgian National Register number or social security identification number, as well as the UBO category, whether the UBO is direct or indirect, the date the individual became a UBO, and the nature and extent of the beneficial interest held.
Supporting documentation must also be uploaded for each UBO, substantiating that the information on the UBO’s identity and the nature and scope of his/her beneficial ownership or control is accurate and up to date. This may include a copy or extract from the share register, the articles of association, a shareholders’ agreement, minutes of a general meeting, a notarial deed, an extract from a foreign trade register, or any other document showing that the information provided is adequate, accurate and up to date.
Which information is available to third parties
When access to the UBO Register is requested for a specific entity, the information made available includes the UBO’s name, month and year of birth, country of residence and nationality, the nature and extent of the beneficial interest held, and the date UBO qualification was acquired. Depending on the requester’s category (see below), further information, such as first name and domicile, may also be disclosed. A consultation also reveals historical data, including prior amendments to the beneficial ownership information, though the supporting documents underlying the registration, such as shareholder registers and other corporate evidence, remain inaccessible.
Because some parties and investors regard the information in the UBO Register as personal, confidential or otherwise sensitive, questions frequently arise as to who may access it.
Who has access to the UBO Register?
Public authorities
Article 6(1) of the UBO Royal Decree distinguishes three categories of public authorities entitled to access the UBO Register, which can be summarized as follows:
- Competent authorities: Authorities responsible for anti-money laundering and countering the financing of terrorism (“AML/CFT”) enforcement, tax matters, criminal asset recovery, cash transport reporting, financial intelligence and supervision.
- Sanctions authorities: Authorities responsible for implementing and enforcing sanctions, embargoes and asset freezes, such as the Belgian Treasury Administration.
- Other authorities: Federal, Community and Regional authorities tasked with verifying beneficial ownership to fulfil their statutory obligations, such as authorities granting subsidies.
Obliged entities
In addition, so-called “obliged entities” as specified under Article 5 of the AML Act may also access the UBO Register in the context of their KYC obligations. These include, for example, financial institutions such as banks, payment institutions and insurance companies, as well as lawyers, notaries public and accountants. Obliged entities must identify the UBOs of clients with whom they enter into a business relationship or for whom they carry out certain occasional transactions, and they may access the UBO Register solely to comply with these KYC obligations.
General public?
No more access for the general public
Initially, any member of the public could access the UBO Register for most entities. This broad accessibility came under pressure following a judgment of the Court of Justice of the European Union (the “ECJ”) of 22 November 2022, which held that unrestricted public access to UBO information seriously interferes with the rights to privacy and protection of personal data under Articles 7 and 8 of the Charter of Fundamental Rights of the European Union.
Following this judgment, public access to information relating to the UBOs of companies was restricted in member states and is now governed by differing member state-specific rules.
Belgium requires a specific legitimate interest
In Belgium, access is limited to natural persons or legal entities capable of demonstrating a legitimate interest, following the Royal Decree of 8 February 2023 amending the UBO Royal Decree. A legitimate interest exists only where a person or organisation pursues a purpose or carries out activities in a sustained and effective manner connected to the prevention of money laundering, terrorist financing, and related criminal activities. Article 10, § 3 of the UBO Royal Decree further identifies three categories of persons presumed to hold such a legitimate interest:
- persons who pursue a purpose or carry out activities in a sustained and effective manner related to the prevention of money laundering, terrorist financing, and related criminal activities;
- persons acting in court proceedings in connection with such purposes, with a view to defending an interest related to those purposes or activities; or
- persons whose activities are relevant to the prevention of money laundering, terrorist financing, and related criminal activities and who are about to enter into a business relationship or transaction with an entity.
These categories have raised interpretation difficulties, particularly in distinguishing the first from the third. The first clearly includes journalists and NGOs, but it is less clear which other persons or entities fall within the third. The key principle remains a clear link to the fight against money laundering, terrorist financing, and related criminal activities, a link that keeps access limited to a specific category of persons or entities. This may change in light of recently adopted EU legislation.
Finally, it is worth mentioning that Article 16 of the UBO Royal Decree allows the Belgian Treasury Administration, upon request by a UBO, to restrict access to all or part of their information for persons having a legitimate interest and for a limited number of obliged entities. Restrictions may be granted on a case-by-case basis where the beneficial owner demonstrates that access would expose him/her to a disproportionate risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation, or where the beneficial owner is a minor or otherwise legally incapacitated.
Impact of the EU AML package
On 30 May 2024, the European Union adopted a new legislative package aimed at strengthening the prevention of money laundering and terrorist financing (the “EU AML Package“). Among other measures, it includes Directive (EU) 2024/1640 (the “6th AML Directive”) and Regulation (EU) 2024/1624.
The EU AML Package introduces an updated AML framework, including several changes to the UBO framework. Following the ECJ judgment, the 6th AML Directive confirms that access to UBO Registers must be restricted to persons or entities able to demonstrate a legitimate interest. Because divergent member state approaches could undermine harmonised implementation of the EU’s AML/CFT framework, the 6th AML Directive also introduces an EU-level framework for recognising and verifying such legitimate interest, to be transposed into national legislation by 10 July 2027 at the latest.
The 6th AML Directive introduces several categories of persons and entities presumed to have a legitimate interest. Two are particularly worth mentioning:
- journalists, as well as non-governmental organisations and academics, are presumed to have a legitimate interest, given the role they have played in exposing money laundering and related criminal activities;
- any natural or legal person who is likely to enter into a transaction with a legal entity and who wishes to verify that the transaction cannot be linked to money laundering, associated criminal activities or terrorist financing. The 6th AML Directive clarifies that the notion of a “transaction” is not limited to trading activities or the provision or purchase of products or services: it may also cover the investment of funds or crypto-assets in the entity, or the acquisition of the legal entity itself. The legitimate interest requirement should accordingly not be read as being met only by persons carrying out economic or commercial activities in the narrow sense.
Other, more specific categories of persons or entities include, in particular:
- entities that are subject to AML/CFT requirements in third countries, insofar as they need the information to carry out customer due diligence on a customer or prospective customer established in the European Union, as well as third-country authorities that need the information to perform their own AML/CFT investigations or analyses;
- authorities responsible for company registration, for scrutinising cross-border conversions, mergers and divisions, for implementing EU funding programmes, and for public procurement procedures, each in respect of the entities falling within their remit; and
- providers of AML/CFT products, such as customer-screening tools, to the extent that the products built on the register’s information are supplied only to obliged entities or competent authorities for AML/CFT purposes.
Finally, the 6th AML Directive leaves room for a residual category: member states must ensure that any other natural or legal person able to demonstrate, case-by-case, a legitimate interest connected with preventing money laundering, associated criminal activities or terrorist financing is granted access. This keeps the regime flexible for situations the Directive does not expressly list, though each member state must notify the Commission of any additional category it recognises.
From a corporate M&A perspective, the category of persons likely to enter into a transaction with the entity concerned is probably the most noteworthy addition. Read together with recital 42 of the 6th AML Directive, it could give a prospective acquirer (or its advisors) a basis to consult the UBO register of a target during an acquisition or due diligence exercise, in order to verify that the target’s UBOs are not linked to money laundering, associated criminal activities or terrorist financing. If confirmed in practice, this would give dealmakers a formal route to a register that obliged entities such as banks and law firms could, until now, consult only for their own customer due diligence purposes, not on behalf of a client contemplating a transaction.
Altius' Corporate team advises regularly on UBO related matters. For questions, please do not hesitate to get in touch with Altius.
Authors:
- Jérôme Vermeylen, Partner at Altius
- Olivier Cuti, Associate at Altius
- Elias Nys, Associate at Altius
