The Council of Ministers approved in its last meeting the normative act for extending the deadline for declaring the beneficial ownership registry. The new deadline is June 30, from March 31 as foreseen in the initial version of the law.
According to the Act: In Article 15, the words
“...no later than 60 calendar days from the creation of the register, as determined by point 2 of this article...”
replace with
“... as of June 30, 2021 ...”
This normative act enters into force immediately and is published in the “Official Gazette.”
The law also foresees other changes, such as extending the validity of foreign-origin documents by 90 days (from the current law's 1 month), following complaints from foreign companies that it was difficult for a foreign entity to obtain the necessary documentation from their country of origin, have it apostilled, officially translated into Albanian, and notarized within such a short timeframe.
This postponement comes as a result of numerous complaints from business associations that expressed concern regarding the issues they were facing in declaring beneficial owners, especially foreign ones. In early March, 11 Chambers of Commerce and Business Associations, primarily foreign, sent a letter to the Minister of Finance, Anila Denaj, two parliamentary commissions, and for their information, Prime Minister Edi Rama, requesting an extension for the declaration of beneficial owner data.
The National Business Center (QKB) announces that there are approximately 55,000 entities (commercial entities and NGOs) in total that are obligated to register their beneficial owner. The penalty for non-compliance is 500,000 ALL (approximately 4,000 euros). All entities or non-profit organizations that are in a passive status are also obligated to make this declaration, and only deregistered entities are excluded. The declaration requirement is not limited to natural persons.
Law on “Beneficial owner registration”, Which was a request from the European Mechanism Moneyval With the aim of combating money laundering, it was approved in August 2020, while the directive regulating its operation was approved in December 2020. The law, which aims to ensure transparency regarding the shareholders of so-called offshore entities (with unknown owners), provided one month for the creation of the Beneficial Ownership Register (BOR), by January 31st, a process carried out by the National Agency of Information Society (AKSI). After the creation of the register, reporting entities have 60 days to register the beneficial owner(s). However, this process is encountering numerous difficulties, ranging from the platform's functionality to technical ambiguities regarding the beneficial owner of NGOs, the time required to obtain documentation for foreign investors, the identification of foreign companies listed on various stock exchanges, and companies where the beneficial owner is not a natural person but a foreign state. Consequently, businesses have requested an extension, especially since March also coincides with the submission of annual financial statements, increasing the burden on financiers.
Beneficial owner, as defined by law, is the individual who owns or ultimately controls, directly or indirectly, 25 percent or more of: shares or quotas; equity participation in the entity's capital; voting rights; or who benefits from transactions carried out by the entity on his behalf.
Normative Act
FOR
AMENDMENTS AND ADDITIONS TO LAW NO. 112/2020, “FOR THE REGISTER OF BENEFICIAL OWNERS”
In support of Article 101 of the Constitution, on the proposal of the Minister of Finance and Economy, the Council of Ministers
DECIDED:
In law no. 112/2020, “For the beneficial owners register”, these changes and additions are made:
Article 1
In letter “c” of point 2 of article 2, the words “...religious communities...” are replaced with the words “...religious congregations...”.
Neni 2
In point 3.2.1 of article 4, the following changes and additions are made:
- The words “... permanent residence address ...” are replaced with “... place of residence address ...”.
- In letter “c”, after the paragraph “issue date and expiry date of the travel document”, a paragraph is added with the following content:
“residential address.”.
Article 3
In letter “b”, point 3, article 5, the words “... within 30 days ...” are replaced with “... within 90 days ...”.
Article 4
In point 1 of Article 14, the words “... in point 5.1 ...” are replaced with “... in point 3.1 ...”.
Article 5
In Article 15, the words “... no later than 60 calendar days from the creation of the register, as defined in point 2 of this article ...” are replaced with “... by June 30, 2021 ...”.
Article 6
Entry into force
This normative act enters into force immediately and is published in the Official Gazette.
Source: Monitor Magazine.
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