Gallery

On Friday, 8 July, the Saeima adopted in the last reading the amendments to the Commercial Law that were deemed urgent and aimed at identifying beneficial owners.

According to the Law, enterprises will have to submit information on beneficial owners to the Register of Enterprises, and the data, if needed, will be available to law-enforcement agencies and audit institutions supervising tax administration, public procurement and public–private partnerships.

The Saeima supported the proposal of the responsible committee, according to which the beneficial owner is a shareholder or a stockholder of a capital company and is a natural person unless, in accordance with Sections 1.5.a or 1.5.b of the Law on the Prevention of Laundering of Proceeds Derived from Criminal Activity and Financing of Terrorism, another person is considered the beneficial owner in a capital company.

The Law sets forth that the data on beneficial owners should be provided by a company’s shareholders who hold shares in their name but to someone else’s benefit and who have at least 25% of shares or stocks. Such shareholders or stockholders will be obliged, within two weeks, to submit the information to the relevant capital company, which will forward it to the Register of Enterprises within two weeks.

The obligation to provide information on beneficial owners will also apply to capital companies’ shareholders other than natural persons whose participation is at least 25% and that were not founded in accordance with laws of the EU member states. In their declarations, such legal entities will have to declare founders, shareholders or other persons corresponding to this status who benefit from these shareholders.

The declaration should contain data that unmistakably identifies beneficial owners.

If a shareholder cannot reasonably establish the identity of or obtain specific data on the person considered the beneficial owner, or if, according to provisions of the Law on the Prevention of Laundering of Proceeds Derived from Criminal Activity and Financing of Terrorism, such a person does not exist, then the shareholder should notify the capital company of the relevant circumstances.

These requirements will apply to members of capital companies and partnerships.

The declaration on the beneficial owners should be submitted according to the provisions of the Group of Companies Law. The number of shares held by a shareholder will also be established according to the provisions of the Group of Companies Law.

Amendments to the Law will come into force on 13 July 2011.

The information on beneficial owners, based on the list of shareholders as of 12 July 2011, or, in case the number of shares has been reduced, as of the date of filing the declaration, will have to be submitted by the end of this year.

Eighty-three MPs voted in favour of the amendments, no one was against and one abstained.

Saeima Press Service