New legislation regarding the ultimate beneficial owner and an overview of sanctions for breach of the registration duty

Novinky

In an effort to reform the existing patchy legislation regarding the ultimate beneficial owners, the Czech Ministry of Justice has drafted an amendment to the regulation governing the register of beneficial owners. Most importantly, these new rules for the beneficial owners register should clarify the definition of an ultimate beneficial owner and thus effectively prevent any irregularities in the interpretation of this term. One of the provisions included in the bill contains an exhaustive list of entities which do not have an ultimate beneficial owner and which are therefore not obliged to register one (such as the residential unit owners association).

In particular, the bill specifies/governs:

  • more detailed information on the documentation to be attached to the petition for a beneficial owner registration, and
  • imposing sanctions in cases when a) the entity obliged to register a beneficial owner fails to register any data about the beneficial owner within the reasonable time period stipulated by the court, or b) fails to ensure that the data about the beneficial owner correspond to the current situation – in the first case the imposed fine may amount up to CZK 50,000 and in the latter even up to CZK 250,000.

It is expected that the legislation will become effective in late 2020.