CENTRAL REGISTER OF ULTIMATE BENEFICIAL OWNERS
On May 25, 2018, the National Assembly of the Republic of Serbia adopted the Law on the Central Record of Ultimate Beneficial Owners ("Official Gazette of the Republic of Serbia", No. 41/2018 - hereinafter: the Law), upon proposal of the Ministry of Economy to the Government, which envisages the establishment, the basis for recording and the manner of keeping the Central Record of the real owners of legal entities and other entities registered in the Republic of Serbia in accordance with the law. The said Act entered into force on June 8, 2018.
The main goal of this law is to improve the existing system of detecting and preventing money laundering and terrorist financing and harmonizing domestic legislation with international standards in those areas where the Republic of Serbia has not sufficiently harmonized legislation.
It is important to note that in order to conceal the real owner of the Registered Entity, it does not enter the data on the real owner of the Registered Entity in the Central Record, enter false information about the real owner of the Registered Entity as true, change or delete the true information about the real owner of the Registered Entity, with a prison sentence of three months to five years.
A fine of 500,000 to 2,000,000 dinars will be imposed for a misdemeanor. The registered entity - legal entity:
1) if it fails to record the data on the real owner of the Registered Entity in the Central Record within the deadline prescribed by law, a responsible person in a legal entity shall be fined with a fine from 50,000 to 150,000 dinars
2) who does not have and does not keep adequate, accurate and up-to-date information and documents on the basis of which he registered the real owner of the Registered Entity.
At the very beginning, it is important to point out that the legislator, by imposing the aforementioned criminal and misdemeanor responsibilities, has clearly expressed intention to ensure the actual application and compliance with the provisions of the Law.
The provisions of the Law and its solutions that were singled out as the most interesting are the following:
• Obligation to determine the actual owner of the undertaking and to keep the required mandatory information and documentation of the real owner for at least 10 years - (as the deadline for fulfilling this legal obligation was determined on July 8, 2018;
• the obligation to register the data on the real owner through the Business Registers Agency (deadline for fulfilling the legal obligation is January 31, 2019).
From 8 July 2018, business entities were obliged to provide documentation of the real owners and to keep it at the headquarters of the company / organization, if they were in the form:
1) a company (limited liability company or joint-stock company, other than public joint stock companies);
3) a branch of a foreign company;
4) business associations and associations, other than political parties, trade unions, sports organizations and associations, churches and religious communities;
5) foundations and endowments;
7) Representations of foreign companies, associations, foundations and endowments.
It is important to point out that the provisions of this Law do not apply to companies and institutions in which the Republic of Serbia, an autonomous province or a local self-government unit is the only member or founder.
The above mentioned documentation should only be submitted as of January 1, 2019, when the electronic service for the reporting of data on actual owners into the register of the Business Registers Agency will start operating.
Until 01.01.2019. it is necessary to have a statement in which it is clearly defined who are the real owners that contain personal data of natural persons who are considered as real owners. The form of the required statement is not prescribed.
Except for the stated statements, as the necessary documentation it is necessary to have a decision on the registration of an economic entity or an excerpt from the register of the Business Registers Agency showing the actual and current ownership structure, the identity cards or copies of the real owner's passport (one or more of them).
The Central Record shall contain the following information about the real owner of the Registered Entity:
1) for a domestic individual - personal name, unique identification number of citizens and countries of residence;
2) for foreigner- personal name, passport number and country of issue and / or personal number for aliens and / or identity card number of the alien and the country of issue in accordance with the regulations governing the conditions for entry, movement and stay of aliens in the territory of the Republic of Serbia, day, month, year and place of birth, country of residence and citizenship;
3) for refugees or expelled persons - personal name, number of ID card, day, month, year and place of birth and country of residence;
For the purpose of the provisions of the Law the Beneficial Owner of the Registered Entity is:
1) natural person who is directly or indirectly the holder of 25 or more of the stake, shares, voting rights or other rights which represent the base of his/her participation in the management of the Registered Entity, i.e. he/she participates in the capital of the Registered Entity with 25% shares or more;
2) natural person who directly or indirectly has a prevailing influence on the business operations management and decisions making;
3) natural person who indirectly provides or secures funds for the Registered Entity and has thereby a significant impact on the decisions made by the managing body of the Registered Entity regarding the financing and business activities;
4) natural person who is a founder, trustee, protector, beneficiary if he/she is determined, as well as a person holding a dominant position in managing of a trust or another foreign law person;
5) natural person registered for representing the cooperatives, associations, foundations and institutions if the authorized representing person did not register another natural person as the Beneficial Owner.
Finally, it is important to point out that according to the latest data from the Business Registers Agency from December 11, 2018, the Central Record of Real Owners in the APR will be established by the end of the year
In accordance with the Law on the Central Record of Real Owners, as well as on the basis of the published Regulations on the Contents of the Central Record of the Real Owners and the Rulebook on the Method and Conditions for Electronic Data Interchange of the APR and other state bodies, the Central Record of Real Owners will be established by December 31 In 2018, the Agency for Business Registers.
Authorized persons in legal entities and other entities, which were established by 31 December 2018, are obliged to record data in this record no later than January 31, 2019.
The central records of the real owners will be organised electronically, through the Agency's website, where other information and instructions will soon be published.
Lawyer - passed Bar exam
Specialist for Corporate Governance