The Register of Beneficial Owners Must Remain Immediately Accessible in the Future
The Ministry of Finance has proposed restricting public access to beneficial ownership data and introducing penalties for companies that fail to provide information on beneficial owners. The Chamber requested the Ministry to reconsider how to ensure immediate access to beneficial ownership data for obligated entities and to additionally evaluate the proportionality of the proposed sanctions.
Plans to Restrict Public Access to Beneficial Ownership Data
The draft proposal for amendments to the Anti-Money Laundering and Terrorist Financing Prevention Act includes a plan to limit public access to beneficial ownership data. It proposes that, in the future, access be granted within 30 days to individuals on a designated list of authorized persons, including, for example, individuals licensed by the Financial Intelligence Unit, notaries, sworn advocates, bankruptcy trustees, and sworn auditors. By submitting a justified request to the Tartu County Court registry department, those with a legitimate interest, including representatives of civil society, journalists, and persons obligated under anti-money laundering and terrorist financing laws, would also be able to access the data.
The Chamber believes that the plan to restrict access to this data requires additional analysis and consideration to prevent an excessive administrative burden on businesses. The draft proposal specifies that only authorized persons, such as sworn advocates and notaries, may view beneficial ownership data. Meanwhile, for support staff in offices who handle data verification in practice, separate sub-accounts would need to be created. It remains unclear who would be responsible for setting up these sub-accounts. The Chamber suggested that the Ministry allow authorized persons to submit a list of employees who should also have access to the data.
Furthermore, we proposed establishing a system, in collaboration with target groups, that would guarantee immediate access to beneficial ownership data for all obligated persons with a legitimate interest. For example, a real estate agent must, under the Anti-Money Laundering and Terrorist Financing Prevention Act, apply due diligence measures, including identifying the beneficial owner, when finalizing a transaction. Currently, beneficial ownership data is freely and instantly available from the commercial register; however, under the new proposal, a real estate agent might no longer be able to fulfill their legal obligations promptly.
Additionally, it is crucial to ensure a process for data access that is as simple, fast, and ideally free of charge as possible, allowing companies to meet their obligations in a timely manner, particularly given the sanctions imposed due to Russia's war of aggression in Ukraine.
Failure to Submit Beneficial Ownership Data May Lead to Compulsory Deregistration
Under the draft proposal, the Tartu County Court registry department would gain the right, within an administrative procedure, to conduct further inquiries and actions to verify the accuracy of submitted beneficial ownership data. If two or more fines are imposed over the course of a year without the data submission obligation being met, the registry department may recommend to the commercial register administrator that the legal entity be deregistered.
The Chamber believes that the proposal does not sufficiently assess the implications of restricting a legal entity’s right to make entries in the commercial register or being subject to compulsory deregistration if beneficial ownership data is not provided. The plan lacks justification for limiting or revoking the right of a legal entity to make entries in the commercial register or to be deleted from it, given that beneficial ownership data is of an informative nature. In our view, these measures are overly harsh and likely disproportionate, prompting us to suggest an additional assessment of the proportionality and constitutionality of these sanctions.