Key amendments to the Beneficial Owners Register Directive

In addition, on 16 December 2024, the Registrar of Companies and Intellectual Property (RoC) issued Regulatory Administrative Act (RAA) 423/2024 (Amending Directive) which amended the RoC’s primary directive on the Prevention and Suppression of Money Laundering and Terrorist Financing Directive (Beneficial Owners Register for Companies and other Legal Entities), RAA 112/2021, as amended (Primary Directive). The Amending Directive aligns the Primary Directive with the Amending Law.

The aforementioned legislative updates, introduce the following key changes:

Companies and other legal entities which refuse, omit or neglect to meet their obligations under the AML Law and/or the Primary Directive, now risk, in addition to penalties, strike-off from the Companies Register since the RoC now has extended powers allowing them to do so, including pursuant to section 327 of the Companies Law, Cap.113, as amended (Companies Law) and section 57(5) of the General and Limited Partnership and Business Names Law, Cap.116, as amended (Partnerships Law). To our knowledge, however, neither the Companies Law nor the Partnerships Law has been amended to expressly permit this.

Furthermore, the RoC can now seek court orders to enforce compliance, a measure that was not explicit under the previous framework.

In turn, upon receiving the BO information in the BO Register, the RoC is required to immediately send a confirmation email to the submitting entity or individual, confirming the successful recording of the information. This new measure eliminates ambiguity and reassures entities that their compliance efforts have been duly recorded.

There is now a newly introduced obligation on the RoC to inform, via letter or email, companies and other legal entities of approaching BO submission and/or confirmation deadlines, at least 30 days prior to such deadline.

Under the previous framework, companies and other legal entities were solely responsible for ensuring compliance with, and adherence to, such timelines. Therefore, the newly imposed obligation on the RoC to proactively notify is intended to reduce the likelihood of unintentional lapses or oversight as well as to ringfence the RoC’s future decisions against potential legal challenges, including administrative reviews.

The amendments also introduce more measured penalties for violations in comparison to the previous, more draconian, penalties regime.

Previously, companies, other legal entities as well as, inter alia, their officers, including the company secretary, faced an initial fine of €200 and an additional €100 for every day of continued non-compliance, with the total penalty reaching up to €20,000 per person.

The revised AML Law and Primary Directive now expressly exclude directors and secretaries from the imposition of fines. Instead, companies and other legal entities now face, in the event of non-compliance, initial fines of €100 and daily penalties of €50, capping the total penalty at €5,000.

It should be noted, however, that, with the exception of the company secretary, the officers of a company or other legal entity that refuses, omits or neglects to fulfil the mandatory BO Register information, are jointly and/or severally liable with said company or other legal entity for payment of the financial penalty imposed by the RoC. Said officers may not be liable if they can demonstrate that they have exercised due diligence for compliance, including, for instance, obtaining legal advice in relation to these matters, and where any breach of the AML Law or the Primary Directive is not a result of any act, omission, or negligence on their part.

Having said the above, penalties may be imposed on officers (excluding secretaries) in the event where such persons, following notification by the RoC, either (a) refuse, omit or neglect to discharge their duties in relation to BO Register submission requirements and/or (b) submit false, misleading or deceptive information in relation thereto. Such offence is punishable for up to one year of imprisonment, a fine of up to €100,000, or both.

For completion, the revised AML Law now also grants authority to the RoC to establish procedures for administrative review and/or for the submission and examination of appeals against decisions imposing financial penalties on companies or other legal entities.

On 16 December 2024, the RoC addressing concerns relating to the severity and fairness of past penalties imposed, further announced that all fines imposed on individuals, companies or other legal entities as of 1 April 2024 for non-compliance of their statutory duties in relation to the BO Register submission requirements are thereby revoked.

The announcement further mentions the avenues through which affected persons who have already settled imposed fines are to be refunded:

1. For online payments made through JCC, the amount will be refunded directly to the card used for the payment, without any further action required by the affected persons.
2. For payments made at the cashier of the RoC, the amount will be refunded to the applicants’ bank accounts after submitting the KE1 form at the RoC cashier, accompanied by the Authorisation Form for payments via FIMAS, a copy of the payment receipt, and the International Bank Account Number (IBAN) to be credited, as described in the Authorisation Form.

The Amending Directive sets out the new deadlines for submission of the BO information in the BO Register as well as for pertinent confirmation, to the extent not already done so under the previous deadlines:

1. Companies or other legal entities incorporated or registered prior 16 December 2024, are required to electronically submit BO information by 31 January 2025.
2. Companies or other legal entities incorporated or registered after 16 December 2024, have 90 days to electronically submit BO information.
3. The deadline for confirmation of submitted BO information for the year 2024 has been extended to 31 March 2025.

It is important to note that companies or other legal entities have a continuous duty to confirm already submitted BO information every year between 1 October and 31 December. In addition, any changes to the BO information must be communicated to the RoC within 45 days of such change taking place.

To assist with the submissions, stakeholders are advised to refer to the RoC's Guidance to the Final Solution of the BO Register issued in February 2024 (the Guidance), subject to the revisions introduced by the Amending Law and Amending Directive. We anticipate that the RoC will release an updated version of the Guidance in due course reflecting the changes introduced under the aforementioned legislation.

The changes effected through the Amending Law and Amending Directive reflect a calibrated attempt to enhance transparency and fairness while, at the same time, ensuring proportional penalties and robust compliance mechanisms. Stakeholders should become familiar with the updates to the legislation and seek legal assistance for any clarifications, where necessary, in order to ensure compliance.