The Dutch Minister of Finance has clarified the definition of an ultimate beneficial owner (UBO). On 6 April 2018, the draft Governmental Decree regarding the Money Laundering and Terrorist Financing Prevention Act (Governmental Decree, Uitvoeringsbesluit Wwft 2018) was sent to both the First and Second Chambers of Dutch parliament.

Listed companies and their wholly-owned subsidiaries are exempt from appointing a UBO. The UBO of a foundation is now limited to natural persons who have more than 25% ownership or voting rights, or have control. Companies are advised to identify a UBO or pseudo-UBO on the basis of these new guidelines before the amended Money Laundering and Terrorist financing Prevention Act (WWFT) comes into force on 1 June 2018.

Who is a UBO or a pseudo-UBO?

The amendment of the WWFT is based on the Fourth European Anti-money laundering directive. The draft Governmental Decree defines a UBO for every corporate or legal entity. Each legal entity has its own unique definition of a UBO, but common across all these definitions is that a UBO is a natural person who ultimately owns or controls the entity.

If a corporate or legal entity has no UBO, the natural person who is a managing director will be regarded as the senior official; this is known as a ”pseudo-UBO”. Where there is a partnership, one of the partners will be appointed as pseudo-UBO. Below we clarify the definition of a UBO for specific categories of enterprises.

Capital companies
For a capital company, the UBO is a natural person who has an interest of more than 25% through direct or indirect ownership, or who controls the entity.

Exemption for listed companies
Listed companies are exempt from the obligation to appoint a UBO (or a pseudo-UBO). This exemption equally applies to a 100% subsidiary of a listed company.

Foundations, associations, mutual benefit associations and cooperatives
A natural person who directly or indirectly holds more than 25% of ownership, or is entitled to vote for more than 25% with respect to an amendment of the articles of association, or has control of the entity, is appointed as UBO of that foundation, association, mutual benefit association or cooperative.

Partnerships
For enterprises featuring partnerships, the UBO is a natural person who directly or indirectly holds more than 25% of the ownership, or is entitled to vote for more than 25%, or has control of the partnership.

UBO register
The various definitions of UBO defined in the draft Governmental Decree apply equally to the Trade Register Act 2007 (Handelsregisterwet 2007).

When will the amended WWFT come into force?

The amended WWFT is expected to come into force on 1 June 2018. The Governmental Decree will enter into force at the same date. The UBO register provided for in the Trade Register Act is expected to come into force in early 2019.

What are the consequences of the new legislation for your company?

The new legislation will impact the privacy of natural persons due to UBO information becoming publicly available. Entities which do not have a UBO must appoint a managing director as pseudo-UBO.

These changes may result in consequences for shareholders and others in your business. We are available to discuss and provide guidance on the effects of these changes, as well as advising on possible privacy-related measures stemming from the UBO registration. We
will closely monitor and keep you informed on any further developments.

What is the status of the central shareholders register?

The implementation of the central shareholders register has been postponed. At this time, it is uncertain if and when the central shareholders register will be in place; however it is certain that this will be after implementation of the UBO register.