Foreward by Andrew Chilvers
When the 5th Anti-Money Laundering Directive was introduced into law by the UK and EU in January 2020, for many professionals it was a much needed addition to legislation that would significantly help business transparency and combat money laundering. In essence, it was good for business and for public and professional confidence.
All jurisdictions signing up to the 5th Directive will build and maintain UBO registries that will be publicly available at any time. UBO registries will also be set up for bank accounts and trusts, although these latter two will not be publicly available but be accessed by the relevant authority such as financial intelligence units and legal advisors looking into money laundering. Investigative journalists who can show a legitimate interest in the case can also have access, which is vital if another Panama Papers (see below) is to be uncovered. Across the UK and EU national UBO registers will be set to connect through a central European platform by April 2021.
Please provide a brief overview of the UBO Register in your jurisdiction and its history?
Since the 1980s, foreign owned corporations have had to disclose foreign UBO of 25% or more to the IRS. In addition, all transactions with related foreign entities required separate disclosure. In December 2020, Congress enacted the Corporate Transparency Act of 2020 (CTA). This act generally requires beneficial ownership information reporting at the time of formation for a corporation or LLC or registration under state law to do business in the US. The registry applies to domestic and foreign owned entities. No public access to this federal registry is contemplated. Disclosures required to the IRS are also not subject to public disclosure.
How can your firm ensure your clients are fully compliant with the new / existing requirements?
Our firm works with clients to make required disclosures when preparing tax returns. We will inform them of the new requirements under CTA as these rules are published. We always work closely with clients’ legal counsel to make sure disclosure requirements are met.
What changes can we expect to see emerging, are any new proposals expected?
Coming months will see a whole host of regulations published to establish the means of complying with the new requirements under CTA.
