{"id":37455,"date":"2019-06-30T12:58:02","date_gmt":"2019-06-30T09:58:02","guid":{"rendered":"https:\/\/koumentakislaw.gr\/?p=37455"},"modified":"2019-07-10T10:29:01","modified_gmt":"2019-07-10T07:29:01","slug":"registry-of-beneficial-owners","status":"publish","type":"post","link":"https:\/\/koumentakislaw.gr\/en\/articles\/registry-of-beneficial-owners\/","title":{"rendered":"Legal Persons and their Real Beneficiaries"},"content":{"rendered":"

\u00a0<\/strong>Preamble<\/strong><\/h3>\n

\u201cBlessed are those who possess\u201d is a well-known quote that very much reveals, even today, as a system of values, the ethics of our society. It is an expression that interprets the latin quote \u201cBeati possidentes\u201d, which, according to some people, is attributed to Euripides.<\/p>\n

It seems, though, that the international legal order does not blindly agree with such assumptions anymore. Assets are now investigated thoroughly in order to discover whether they have a lawful origin. Legalization of income that comes from illegal activities is getting harder by the day.<\/p>\n

The registration of bearer shares<\/a> is a step to that direction. Another step is identifying the actual shareholders of S.A.s, or maybe further than that: searching for the real beneficiaries \u201cbehind\u201d those appearing as shareholders. Towards the direction of revealing the beneficiaries are clearly heading: a) Act 4557\/2018 (which was recently updated), as well as b) the very recent Ministerial Decree on the creation of the Central Registry of Beneficial Owners.<\/p>\n

 <\/p>\n

\u201cMoney Laundering\u201d<\/strong><\/h3>\n

Things are not that simple!<\/p>\n

Europol, among others, is seeking to locate, in a trans-European level, all assets that do not derive from lawful activities, to detect all attempts of inserting money deriving from illegal activities into the \u201clawful\u201d economy as well as money laundering networks relating to such attempts. In details: \u201c\u2026 organized crime, in most cases, shares a common denominator \u2013 the financial motive. Organized crime organizations increase their assets and then insert those assets into the \u201clawful\u201d economy through money laundering schemes.\u201d Tracking those assets means tracking the networks\u201d (in other words: \u201cfollow the money\u201d).<\/p>\n

This targeting is common on an international level. Our country\u2019s legal system (being always updated and enforced) is heading towards that direction, mainly by following international developments as well as european directives.<\/p>\n

 <\/p>\n

Act<\/strong> 4557\/2018 <\/strong>on<\/strong> money<\/strong> laundering<\/strong><\/h3>\n

This Act is under the title: \u201cPrevention and repression of laundering money deriving from criminal activities and the funding of terrorism – integration of Directive (EU) 2015\/849\u201d<\/em>.<\/p>\n

The aim of the Act is defined in its introductory provision, (article 1): \u201dthe integration in the Greek Legal System of Directive (EU) 2015\/849 of the European Parliament and the Council of 20th<\/sup> of May 2015\u201c on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648\/2012 of the European Parliament and of the Council, and repealing Directive 2005\/60\/EC of the European Parliament and of the Council and Commission Directive 2006\/70\/EC\u201d and the codification of the relevant provisions in national legislation\u201d.<\/p>\n

 <\/p>\n

Who does this Act concern? <\/strong><\/h3>\n

Article 2 of this Act defines the objective of the Act altogether: \u201cpreventing and repressing laundering money that derives from illegal activities and terrorist funding…\u201d,<\/p>\n

When first glancing at this article one will most likely thing that this Act does not concern them or (most) people they know. But when looking at it a bit more carefully, this act does not only address assets that derive from terrorism, guns, drugs, human trafficking or other detestable (to most) activities. This Act applies to so many cases. Article 2 paragraph 3 states that: \u201cLaundering money deriving from criminal activities is the case even when the criminal activities took place in a different state, as long as such those activities would be illegal under Greek law, had they taken place in Greece.\u201d<\/p>\n

\u00a0<\/em><\/p>\n

The \u201cpredicate offence\u201d<\/strong><\/h3>\n

The infamous \u201cpredicate offences\u201d are, as far as this Act and all relevant acts are concerned, all offenses \u201cgenerating\u201d an (unlawful) pecuniary advantage and can possibly result in laundering money deriving from criminal activities. On the list of \u201cpredicate offences\u201d we find not only offences that receive the utmost condemnt by society (e.g. terrorist acts, human trafficking, drugs or guns) but also offences (par. 4. XVI) that relate to tax evasion, not paying debts owed to the State as well as offences punishable with the minimum sentence of six (6) months, from which a \u201cpecuniary advantage can be obtained\u201d: this list is proven to be extremely long and \u201cwide\u201d.<\/p>\n

 <\/p>\n

Special (and Central) Registry of Beneficial Owners<\/strong><\/h3>\n

In<\/em><\/strong> General<\/em><\/strong><\/h4>\n

Act 4557\/2018, article 20 (as recently amended by article 62 Act 4607\/2019 – Government Gazette \u0391 65\/24.4.2019) provides for the creation of a Special and Central Registry of Beneficial Owners. According to that provision, the legal representative of all legal entities residing or taxed in Greece is obligated to keep in a Special Registry of Beneficial Owners with detailed data about the legal entities\u2019 beneficial owners. That Special Registry is registered with the Central Registry of Beneficial Owners, which is kept at the General Secretariat of Information System of Ministry of Finance.<\/p>\n

 <\/p>\n

Information registered on the Special Registry<\/em><\/strong><\/h4>\n

Paragraph 1 of article 20, Act 4557\/2018 provides that: \u201c1. Companies and other legal entities residing in Greece or doing business that is taxed in Greece are obligated to collect and keep a special registry in their headquarters with adequate, accurate and updated information regarding their beneficial owners. These data must at least include the first and last name, date of birth, citizenship and county of residence of the beneficial owners, as well as the kind and extend of the rights they hold. The registry is updated with all necessary information for the identification of the beneficial owner. The legal representative of the legal entity is responsible for keeping the special registry well-documented and updated \u2026 and \u2026 is registered with the Central Registry of Beneficial Owners \u2026 within sixty (60) days from the date of the phased registration per type of legal entity, as determined by the decision of paragraph 11. Changes of the beneficial owner\u2019s information have to be registered within sixty (60) days after they take place.\u201d.<\/em><\/p>\n

Keeping of the Central Registry and its interconnections<\/p>\n

Paragraphs 4 and 5 of article 20 of Act 4557\/2018 provide, among other things, that:<\/p>\n

\u201c4. within the General Secretariat of Information System (G.S.I.S.) is created, with the use of an internet application, the Central Registry of Beneficial Owners, which is electronically connected with the tax registration number of all legal entities and for which the Independent Authority for Public Revenue (IAPR) keeps all the necessary data from the tax registrations, despite other provisions in place\u2026<\/em><\/p>\n

    \n
  1. The General Registry can, also, be connected to the Hellenic Business Registry <\/em>of Ministry of Finance<\/em>\u2026\u201d<\/em><\/li>\n<\/ol>\n

     <\/p>\n

    Sanctions for not keeping the Registry of Beneficial Owners<\/p>\n

    In case the Registry of Beneficial Owners is not kept, there are sanctions in place (par. 8 and 9 of article 20 of Act 4557\/2018): If the legal entity liable does not provide a tax clearance certificate, there is a financial penalty of ten thousand (10.000) euro (which doubles in case of failure to comply) are only some of the sanctions. The rest: Much more serious!<\/p>\n

     <\/p>\n

    The (implementing) decision of the Minister of Finance <\/strong><\/h3>\n

    In the provision of par. 11 of article 20 of Act 4557\/2018, there was a provision for the publication of a decision of the Minister of Finance for the establishing and the details of operation of the Central Registry of Beneficial Owners. The relevant decision of the Minister of Finance, under the n. 67343 \u0395\u039e 2019, decision was very recently published (Government Gazette B, no. 2443, 20.6.2019): The Central Registry of Beneficial Owners is now reality.<\/p>\n

    The obligation to register the information of the beneficial owners in the Registry for most company types is extended from 14.10.2019 to 29.11.2019. For the rest legal entities, it begins on the 16.9.2019.<\/p>\n

     <\/p>\n

    In conclusion<\/strong><\/h3>\n

    Someone may think that they are \u201cblessed those who possess\u201d. But they are not \u201cblessed\u201d those who possess assets and chose to do so in secret.<\/p>\n

    In cases where those assets were obtained through illicit activities, who (besides those directly involved) could make any comment?<\/p>\n

     <\/p>\n

    But, when assets are obtained in a completely lawful way and those who \u201cpossess\u201d have chosen not to present them in a \u201cglass box\u201d as a way of life, for their protection, in the context of their national or international tax planning or\/and any other (not ethically reprehensible) reason?<\/p>\n

     <\/p>\n

    The thinking behind the registration of the Beneficial Owners is not, of course, blameworthy. The restriction, though, of the beneficiaries\u2019 economic freedom cannot be ignored \u2013 at when it comes to the righteous ones among them. Even more so: the Beneficial owners are in actual danger from a possible (unlawful) disclosure of their financial assets and data as well as from unauthorized people possibly accessing the Central Registry of Beneficial Owners.<\/p>\n

    In any case: the recent publication of the decision of the Minister of Finance, which activates the provisions of the Act for the creation of the Central Registry of Beneficial Owners, is a fact. All liable legal (and natural) persons must comply, within the specific time limits set.<\/p>\n

    Everything, from now on, are in (almost) plain view and, in any case, \u201cunder the eye\u201d of the authorities.<\/p>\n

    The sanctions defined by law are not to be taken lightly. Non compliance or (even worse) the concealment of the Beneficial Owners is certain to create, further, serious problems for those involved as well as those liable.<\/p>\n

    So, in the end: \u201cBeati possidentes\u201d?<\/p>\n

    \"stavros-koumentakis\"<\/p>\n

    Stavros Koumentakis<\/a>
    \nSenior Partner<\/em><\/h4>\n

    P.S. A brief version of this article has been published in MAKEDONIA Newspaper (June, 30rd, 2019).<\/p>\n

    \"\u03bc\u03b7\u03c4\u03c1\u03ce\u03bf<\/p>\n","protected":false},"excerpt":{"rendered":"

    \u00a0Preamble \u201cBlessed are those who possess\u201d is a well-known quote that very much reveals, even today, as a system of values, the ethics of our society. It is an expression that interprets the latin quote \u201cBeati possidentes\u201d, which, according to some people, is attributed to Euripides. It seems, though, that the international legal order does…<\/p>\n","protected":false},"author":3,"featured_media":37477,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[206],"tags":[451,154,453,157],"class_list":["post-37455","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","tag---en","tag----en","tag--4548-2018-en"],"_links":{"self":[{"href":"https:\/\/koumentakislaw.gr\/en\/wp-json\/wp\/v2\/posts\/37455","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/koumentakislaw.gr\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/koumentakislaw.gr\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/koumentakislaw.gr\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/koumentakislaw.gr\/en\/wp-json\/wp\/v2\/comments?post=37455"}],"version-history":[{"count":1,"href":"https:\/\/koumentakislaw.gr\/en\/wp-json\/wp\/v2\/posts\/37455\/revisions"}],"predecessor-version":[{"id":37456,"href":"https:\/\/koumentakislaw.gr\/en\/wp-json\/wp\/v2\/posts\/37455\/revisions\/37456"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/koumentakislaw.gr\/en\/wp-json\/wp\/v2\/media\/37477"}],"wp:attachment":[{"href":"https:\/\/koumentakislaw.gr\/en\/wp-json\/wp\/v2\/media?parent=37455"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/koumentakislaw.gr\/en\/wp-json\/wp\/v2\/categories?post=37455"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/koumentakislaw.gr\/en\/wp-json\/wp\/v2\/tags?post=37455"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}