Beneficial Ownership Declaration Form

The requirement to submit the declaration regarding the ultimate beneficial owner was introduced by Law no. 129/2019 for combating money laundering and terrorist financing, as well as for amending and supplementing some normative acts, published in the Official Gazette numbered 589 of July 18, 2019, which entered into force on the July 21, 2019. The law transposes the EU Directive 2015/849 of the European Parliament and the European Council of May 20, 2015, regarding the prevention of the financial system usage for the purpose of money laundering or terrorist financing.

 WHAT IS THE BENEFICIAL OWNERSHIP DECLARATION FORM?

It is a declaration on one’s own responsibility given by the legal representative of the company, or the person authorized by the board of directors of the association/foundation which must include the following information:

  • For legal entities subject to registration in the National Trade Register Office – identification data of the beneficial owner: name, surname, date of birth, personal numerical code, series and number of the identity document, citizenship, residence, and the ways control over the legal entity is exercised.
  • For associations and foundations – identification data of the beneficial owner: name, surname, date of birth, personal numerical code, series and number of the identity document, citizenship, residence.

 WHO ARE THE BENEFICIAL OWNERS WITHIN LAW’S MEANING?

The beneficial owner is represented by any natural person who ultimately owns or controls the customer and/or the natural person in whose name or in whose interest a transaction, operation or activity is performed, directly or indirectly.

In the case of companies subject to registration in the National Trade Register Office and foreign corporate entities, the beneficial owner is:

  • the natural person or persons who ultimately own or control the company:
  • The ownership of 25% plus one share or the participation in a company’s capital by over 25% by a natural person is an indicator of the direct exercise of the property right.
  • Owning 25% plus one share or participation in the capital of a company by over 25% by a foreign corporate entity, which is under the control of a natural person, or by several foreign corporate entities, which are under the control of the same natural person is an indicator of the indirect exercise of the property right.
  • OR the natural person holding a senior management position, namely: the administrator(s),

the members of the board of administration/supervisory board, directors with delegated

authority from the administrator/board of administrators, the members of the board of

executives.

In the case of non-profit legal entities (associations or foundations), the beneficial owner may be any of the following persons: associates or founders; members of the board of directors; the persons entrusted with executive functions by the board of directors; in the case of associations, the natural persons category or, as the case may be, the natural persons in whose main interest they have been constituted, respectively, in the case of foundations, the natural persons category in whose main interest they have been constituted or any other natural person exercises control in the last resort, by any means, over the non-profit legal person.

WHO IS REQUIRED TO SUBMIT THE BENEFICIAL OWNERSHIP DECLARATION FORM?

After the amendments brought by the Law no. 101/2021, currently the obligation to submit the declaration is directed to legal entities subject to registration in the National Trade Register Office, trusts, associations, and foundations.

Exceptions to the form submission:

  • autonomous utilities, companies and national companies, as well as companies wholly or predominantly state-owned;
  • associations or foundations set up/run only by natural persons, when the only beneficial owners are those provided in the statute;
  • inter-community development associations, as defined by Government Emergency Ordinance no. 57/2019 on the Administrative Code, as well as the federal structures formed by them.

WHO IS THE PERSON REQUIRED TO SUBMIT THE BENEFICIAL OWNERSHIP DECLARATION FORM?

 The person required to submit this form is the legal representative of the organization – the administrator/the natural person designated by the board of directors of the association or foundation.

WHEN MUST THE BENEFICIAL OWNERSHIP DECLARATION FORM BE SUBMITTED?

The deadline by which the declaration must be submitted, as well as whether there is a requirement to submit annually or not, were concerns which were addressed, at least for 2021, by Law number 101/2021 and the Emergency Ordinance no. 43/2021.

Legal entities subject to registration in the National Trade Register Office have the obligation to submit the declaration:

  • Upon the company’s registration;
  • Annually – within 15 days from the approval of the annual financial statements, except for 2021, during which the term was extended to October 1, 2021.
  • Whenever there is a change regarding the identification data of the beneficial owner, within 15 days from the date on which the change has intervened.

Associations and foundations:

  • As per associations and foundations that are not constituted/run solely by natural persons, the form must be submitted alongside the application for the association’s registration in the National Register Office of Associations and Foundations and
  • Whenever there is a change regarding the identification data of the beneficial owner, the declaration shall be communicated to the Ministry of Justice within 30 days from the date on which the change intervened, hence eliminating the requirement for the annual Beneficial Ownership Declaration Form submission.

HOW IS THE BENEFICIAL OWNERSHIIP DECLARED?

In the case of legal entities subject to registration in the National Trade Register Office:

  • The declaration can be in the form of a document under private signature or electronic form and can be sent to the National Trade Register Office electronically, with electronic signature, or via postal and courier services;
  • The declaration can also be given before the representative of the National Trade Register Office or it can be submitted personally, as well as through a representative, having a certain date, given by the notary public, or attested by a lawyer.

In the case of associations and foundations, the declaration shall be submitted:

  • Alongside the application for registration of the association/foundation in the National Register Office of Associations and Foundations, while the authorized person must also submit a declaration on his/her own responsibility including the identification data of the beneficial owners of the association;
  • Whenever there is a change regarding the identification data of the beneficial owner, this shall be communicated to the Ministry of Justice by an authorized natural person through a declaration on his/her own responsibility.
  • The declaration may be in the form of a private signature or in electronic form and may be communicated without any other formalities, electronically, by electronic signature or via postal and courier services.

SANCTIONS PROVIDED BY LAW FOR FAILURE TO FULFILL THE OBLIGATION TO SUBMIT THE BENEFICIAL OWNERSHIP DECLARATION FORM

In the case of legal persons subject to registration in the National Trade Register Office, the law provides for the following penalties:

  • A fine from 5,000 lei to 10,000 lei;
  • If within 30 days from the date of application of the contravention penalty the representative of the legal person has not submitted the declaration regarding the identification data of the beneficial owner, at the request of the National Trade Register Office, the court or, as the case may be, the specialized court may dissolve the company. However, the cause of dissolution may be removed before any substantive conclusions can be drawn.

In the case of associations and foundations the sanctions are as follows:

  • A fine from 200 lei to 2,500 lei;
  • The failure to communicate by an association or foundation of the identification data of the beneficial owner, in order to update the records regarding the beneficial owners of associations and foundations – if it was previously the case of being sanctioned for not submitting the declaration – this constitutes a contravention and is sanctioned with a fine starting from 500 lei to 5,000 lei;
  • If within 30 days from the communication of the second report of contravention there is no updated communication from the offender regarding the identification data of the beneficial owner, the dissolution of the association or foundation may be ordered. The minutes are further communicated to the offender, as well as to the Ministry of Justice in order to be registered in the records regarding the beneficial owners of the associations and foundations.

Hopefully, you have found the information presented to be useful. Nevertheless, our team is always available to provide you with any additional assistance or clarification on the issues raised above. We would like to kindly remind you that we can be contacted at the following e-mail address: office@psbh.ro, or you can find us on Facebook & LinkedIn.

This article was written by our colleague, Andrea Stercu – lawyer.

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