By Pekka Valo, Senior Counsel, Aliant Finland.
The European Union 5th Anti-Money Laundering Directive requires that EU member states should set up beneficial ownership registers for corporate and other legal entities by 10 January 2020 and for trusts and similar legal arrangements by 10 March 2020. I will now describe the implementation and requirements in Finland.
The relevant provisions of the Finnish Anti-Money Laundering Act came into force 1. July 2019 and companies were required to file beneficial owner details with the Finnish Trade Register by the end of June 2020 and thereafter keep the details in the Trade Register up to date.
The act does not define any specific sanctions for failing to file or keep the information up to date. However, as for example banks, accounting firms and law firms are obliged to identify their customers and check the beneficial owner details and they may report any deficiencies or inconsistencies in the company’s beneficial owner details. Companies should therefore comply with the requirements to avoid delays, account closures and other potential problems.
The requirements apply to limited liability companies and co-operatives as well as some general partnerships and limited partnerships but not to private traders.
Beneficial owner is always a natural person. A person who either owns a company or otherwise exercises control over the company is regarded as a beneficial owner. An organisation, a company, public body or the estate of a deceased person may not be filed as a beneficial owner. Information has to include details of the ultimate beneficial owner. In a company, there can be none, one, or several beneficial owners. Those who meet any of the following requirements are considered as beneficial owners:
- The person owns more than 25% of the company shares directly or indirectly through another company.
- The person holds more than 25% of the voting rights in the company directly or indirectly through another company. Shares that belong to the company or its subsidiary organisation are not taken into account when counting the number of votes.
- The person exercises actual control over the company on other grounds. Other grounds may refer to a partnership agreement, for example.
A company must file a notification of beneficial owners even if the company has no beneficial owners meeting these requirements or the company does not know them. In this case, the board or the general partners of the company, or the managing director or any other person in a corresponding position are considered as actual beneficial owners according to the Act on Money Laundering.
Companies can file the notifications using the Trade Register online service at ytj.fi. The service is free of charge and available in Finnish and in Swedish. We are pleased to provide any help or advice regarding beneficial owner notifications if needed.