- Key Notes:
- Authorized representative’s obligation to register in the Record data on beneficial owner of the Entity within 15 days as of occurrence of grounds for registration.
- Obligation of possessing and keeping true, updated and relevant data and documents on beneficial owners of Entities within 10 years’ period as of date of registration in the Record.
- Obligation of delivery of respective documents and data (on beneficial owners of Entities) to competent state authorities, without delay.
- Obligation of determining beneficial owners of the Entities at the latest by 08 July 2018.
- Obligation of registration of beneficial owners in the Record at the latest by 31 January 2019.
National Assembly of Republic of Serbia adopted on 25 May 2018 the Law on Central Record of Beneficial Owners (the “Law”), for the purpose of harmonization of domestic legislation with the terms defined in the Directive 2018/849, on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (the “Directive”), adopted on 20 May 2015 by the European Parliament.
Article 30 of the Directive defines obligation for member states to ensure that business and other entities registered in their territories, to obtain and hold adequate, accurate and current information on their beneficial owners as well as interest possessed.
- Obligors of the Law:
The Law applies to companies (other than public stock companies and those with shareholding interest of Republic of Serbia), branches of foreign companies, cooperatives, foundations, endowments, business associations and representative offices of foreign companies, associations, foundations and endowments (jointly: the “Entity”).
- The term “beneficial owner”:
For the purposes of this Law, the beneficial owner of the Entity is considered a natural person:
a) who directly or indirectly possess 25% or more share, stocks, voting rights or other rights, based on which he/she participates in management of the Entity;
b) who directly or indirectly has dominant influence in the management of the Entity and decision-making process;
c) who provides or is providing to the Entity indirectly funds, based on which he/she has significant impact on decision-making process of the Entity in relation to financing and management;
d) who is a settlor, trustee, protector, beneficiary as well as person having dominant position in management of trust;
e) registered for representation of cooperatives, associations, foundations, endowments and institutions – under condition that such person failed to register other natural person as beneficial owner.
If the beneficial owner cannot be determined in one of manners defined in items “a” to “d” above, natural person registered for representation of respective Entity shall be considered as beneficial owner.
- Central Record:
For the purpose of keeping records on beneficial owners of the Entities, Business Registers Agency (the “BRA”) shall establish central record of beneficial owners (the “Record”) at the latest by 31 December 2018.
In addition to regular information on the Entity, the Record shall include basic information on the beneficial owner – name, personal identification number / passport number and resident state of that person, as well as legal ground for becoming the beneficial owner.
- Registration in the Record:
Registration of basic information on the Entities in the Record makes the BRA, while an authorized representative of the Entity is obliged to make registration of data on beneficial owner of the Entity within 15 days’ period as of occurrence of the grounds for registration.
Unlike the Directive, which allows third parties access to data from the record under condition of existence of legal interest for gaining respective data, the Law provides the BRA possibility to independently determine the issue of accessing to internet page of the Record and manner of use of data that will be registered in the Record.
- Obligation of keeping records:
The Entities are obliged to possess and keep true, updated and relevant data and documents on beneficial owners of the Entities within 10 years’ period as of date of registration of respective information in the Record. In addition, upon request of the National Bank of Serbia or competent state authority, the Entities are obliged to deliver respective documents and data without delay to those authorities.
- Disputing registration in the Record:
Natural person being registered in the Record as the beneficial owner of the Entity is authorized to file a lawsuit against the Entity, for the purpose of determining that such person is not the beneficial owner of the Entity. In case of successful outcome of dispute, the court orders the BRA deletion of respective person from the Record.
For violation of obligations determined by this Law, the legislator has determined criminal and misdemeanour liability.
Penalty of imprisonment from 3 months to 5 years is confined for a person, who with the intention of concealing the beneficial owner of the Entity in the Record:
- fails to register information on beneficial owner of the Entity; or
- registers false information on beneficial owner of the Entity; or
- changes or deletes true information on beneficial owner of the Entity.
In addition, the Entity may be charged with a fine of up to RSD 2 million, in case of: (i) failure to register information on beneficial owner of the Entity within 15 days’ period, or (ii) failure to possess and keep data and documents based on which it registered beneficial owner of the Entity.
- Harmonization deadlines:
All existing Entities are obliged internally to determine beneficial owner as well as to prepare documents and data necessary for determining identity of beneficial owner within 30 days’ period as of entering into a force of the Law (i.e. at the latest by 08 July 2018).
Authorized representatives of the Entities are obliged to register information about beneficial owners of the Entities incorporated until 31 December 2018 at the latest by 31 January 2019.