The beneficial owner is Identification of the beneficial owner

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

"Beneficial owner" is a concept used to collect and store certain information about companies that interact with organizations listed in Art. 5 of Law No. 115-FZ. This list includes institutions that carry out various operations related to property and money. Further in the article we will dwell on the concept itself in more detail, explain its meaning. We will also get acquainted with a number of provisions of the legislation by which it is regulated.

Legislative Framework

In accordance with the established norms, the innovation will apply to almost all organizations that operate in the securities market, are serviced by insurance companies and have a bank account. According to the federal law on the implementation of actions against the implementation of the legalization (laundering) of proceeds from crime and the financing of terrorism, the beneficial owner is an entity that does not have a clear status.

All the information collected will be aimed at creating counteraction to various financi altransactions that are prohibited by law. However, representatives of the authorities have repeatedly voiced information that is contrary to the law. An example of this is the Budget Message from the President of the Russian Federation "On Budget Policy in 2010-2012" dated May 25, 2009 to the Federal Assembly. This text contains certain recommendations to consolidate the mechanism of action against the use of agreements to reduce taxes and prevent double taxation in the course of transactions with foreign enterprises in the event that a non-resident of the country with which the agreement was concluded is the ultimate beneficiary.

The tax policy of the future

The government's plans for the coming years include certain changes. Some of them are specified in the tax code of the Russian Federation. The essence of these changes is to create counteraction to violations when international tax agreements are used for illegal purposes. On the basis of legislative acts, organizations should also be encouraged to transfer to the jurisdiction of the Russian Federation from offshore zones of the world. Tax benefits and preferences, which are specified in international treaties with the Russian Federation, will not apply if the ultimate beneficial owner is a resident of the country.

Identification of the beneficial owner

The issue of disclosing the beneficial owner has already been raised several times in modern Russian business, but due to the lack of a clear definition, it remained unconsidered. An example of thisis the order of the Prime Minister. According to this document, many companies, mostly state-owned, sent out to their counterparties a request to provide information about all owners and ultimate beneficiaries. However, due to the lack of a clear formulation of this concept and the legal regulation of the disclosure procedure, it was almost impossible to provide the necessary information. However, already in July 2013, the beneficial owner of the client began to be identified by banking organizations.

List of required personal data

In accordance with the law, legal entities that have a bank account and are customers of enterprises that carry out transactions with funds will have to disclose information about beneficiary owners. The total volume, nature and process of submitting information must comply with the procedure approved by the Government of the Russian Federation. However, due to the fact that today the main provisions have not yet been published, all information will be transmitted in accordance with Law No. 115-FZ and the Regulation approved in 2004, August 19, by the Bank of Russia. It contains information on the identification by credit companies of beneficiaries and clients in order to take action against the legalization (laundering) of proceeds from crime and the financing of terrorism.

Based on the law, in order to implement the process of identifying an individual, it is necessary to determinenext:

• last name, first name, patronymic;
• date of birth;
• actual address of residence or temporary residence;
• personal tax number (if available)
• citizenship;
• for foreigners - details from the document indicating the right to stay on the territory of the Russian Federation (migration card);
• Details of an identity document.

Interpretation of the concept of "beneficiary"

In Law No. 115-FZ, the beneficial owner is not the only new definition. Together with it, the term "beneficiary" is used. The Regulations specify the procedure for carrying out the identification of the latter. It is an entity for the benefit of which certain actions are carried out in the course of financial transactions. Why is the statutory beneficial owner the founder? Let's find out. Participants that carry out their activities on the basis of an agency agreement, an agency agreement and trust management are subject to identification. The beneficiary may be a legal entity or an individual. That's exactly what the law says. But the beneficial owner is only an individual. What does it mean? In other words, the beneficial owner of a legal entity is the founder of the enterprise.

Setting procedure

Guided by law, banking institutions must require information to disclose the beneficiary and beneficial owner. This, in turn, may lead to certaindifficulties. They are related to the fact that the identification of the beneficial owner is more clearly described in the law. But the procedure for installing it is somewhat confusing, because for this it must be recognized as a person who is indicated in the law as a beneficial owner. The legislation does not provide for such requirements. In this regard, the bank is not en titled to request from the client data that is not indicated in the list of identification of the beneficial owner.

Information gathering

When collecting information about the beneficial owner, banking institutions have the right to use any documents provided by the client. What is included in their list? Usually this is a questionnaire of the beneficial owner, various types of applications and letters to the bank. What does the law say about this? The regulation states that if the owner is not found when identifying the owners, the user's executive body is recognized as the owner.

This innovation is aimed at identifying one-day firms. Most likely, it will be applied to enterprises in which the beneficial owner cannot be identified. These organizations include the following:

1) non-profit companies that do not have an owner, but there are beneficiaries;

2) mutual funds;

3) joint-stock companies with several owners, each of which does not meet the criteria of a beneficial owner.

4) companies that have members who own assets using trustdesigns.

Separate (special) categories of enterprises

Categories of parties to relationships that are not required to disclose information about beneficial owners include the following:

1) government agencies;

2) local authorities;

3) off-budget funds owned by the state;

4) organizations or corporations in whose capital more than 50% of the shares are owned by the Russian Federation, its constituent entities and various municipalities;

5) a foreign state, an international organization or an administrative-territorial unit of a foreign state with independent legal capacity;

6) issuers of securities.

Approved Exceptions

As a rule, the processing of personal information of each person, enterprise or business entity requires his written consent. However, Art. 6 of Law No. 152-FZ on personal information provides for circumstances in which consent to data processing is not required. These include:

1) circumstances provided for by international treaties or laws that allow the achievement of established goals;

2) certain powers or functional duties that are granted by the legislation of the Russian Federation to function operators.