Don’t tell me about Discrepancies

by John McCarthy Consulting Ltd. | May 19, 2021 | Blog, News

In last week’s blog we alerted readers to the two types of anomaly that can occur on the Register of Beneficial Ownership:

• A discrepancy – there is an error on the Beneficial ownership Register; or
• Non-compliance – the Beneficial Ownership details on the register are blank (we believe this to be the case for approximately 20% of obliged entities).

Regulation 20 (3) of SI 110/2019 provides for discrepancies and non-compliance to be reported to the Registrar of Beneficial Ownership by a ‘designated person’(accountants among certain others) or a ‘competent authority/relevant person’ (e.g. Garda, Central Bank and regulatory bodies).

This week we will look at the steps required to notify a discrepancy where accountants and similar ‘designated persons’ must use a Form DN2 to make the formal notification.

There are three basic steps to follow:

1. The ‘designated person’ must appoint RBO Liaison Officer(s) who will be responsible for coordinating and authenticating reports of discrepancies to the Registrar on behalf of the ‘designated person’ and liaising with the RBO on day-to-day operational matters.

Liaison Officers can be appointed using a BEN3A Form which can be obtained by sending an e-mail to discrepancies@rbo.gov.ie

2. Upon receipt of the completed BEN3A, the RBO will provide the appointed RBO Liaison Officer(s) with a DN2 form and details on how to upload the DN2 to the RBO ShareFile Account (used for data protection reasons).
3. The RBO Liaison Officer can then upload the DN2 to the ‘designated person’s’ secure folder in the RBO ShareFile Account.

Only a ‘designated person’ as defined in Section 25, Criminal Justice (Money Laundering & Terrorist Financing) Act, 2010 (as amended), is entitled to report a discrepancy to the Registrar. This is usually the Money Laundering Reporting Officer.

Please note that making the notification may not be the end of your responsibilities. Depending on the circumstances there may be additional reporting duties for the accountant to consider. Where the discrepancy looks less than innocent, perhaps even suspicious, or it may be linked to some other forms of non-compliance by the same entity or persons connected with that entity , the accountant may need to make further reports to relevant authorities.

For more on these obligations, see our latest publication, the AML Policies, Controls & Procedures Manual for 2021.

The Manual contains all the latest requirements relevant to accountants contained in the Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2021 now fully in force.  Future blogs will look at various parts of the new and existing provisions of this legislation.

For more blogs please visit this link and for our publications and manuals and services click here.

Are you the Beneficial Owner?

by John McCarthy Consulting Ltd. | May 17, 2021 | Blog, News

The Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2021 contains the latest list of new responsibilities on ‘designated persons’ (accountants among others) to corroborate the beneficial ownership details of client entities being taken on. Incidentally, the Law Reform Commission has published the consolidated version of this legislation and its available at this link.

Prior to the establishment of a business relationship with a customer, a designated person is required to ascertain that information concerning the beneficial ownership of a customer is entered in the relevant beneficial ownership register.

This register is available at different websites depending on the type of entity in question:

• the Central Register of Beneficial Ownership of Companies and Industrial Provident Societies at the RBO register maintained by the Companies Registration Office; and the
• the Central Register of Beneficial Ownership of Irish Collective Asset-management Vehicles, Credit Unions and Unit Trusts at the Central Bank.

A designated person must not engage in a business relationship until the beneficial ownership information is obtained, unless the designated person is a financial institution. A financial institution may open an account ahead of obtaining the information but cannot allow any transactions to occur.

Where the beneficial owner is recorded as being a senior managing official, a designated person will be required to verify the identity of that person, keep records of the steps taken and record any difficulties encountered in the verification process. See more on this responsibility below.

There are two types of anomaly that a designated person must report to the relevant registration authority, being:

• A discrepancy – there is an error on the Beneficial ownership Register; or
• Non-compliance – the Beneficial Ownership details on the register are blank (we believe this to be the case for approximately 20% of obliged entities).

We will explain these obligations in more detail in the coming weeks. We have been led to understand that, as part of their AML Procedures, banks are checking the RBO register, before opening bank accounts for customers.

For the latest details on these obligations, see our AML Policies, Controls & Procedures Manual for 2021.

The Manual contains all the latest requirements relevant to accountants contained in the Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2021 now fully in force.  Future blogs will look at various parts of the new and existing provisions of this legislation.

For more blogs please visit this link and for our publications and manuals and services click here.