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19 November 2019

The Central Register of Ultimate Beneficial Owners

The Central Register of Ultimate Beneficial Owners (CRBR) is the new governmental public list that gathers information on the Ultimate Beneficial Owners (abbr. UBOs) that directly run Polish companies. It comes into force on April 13th, 2020, as an implementation of the EU directive under the law on counteracting money laundering and terrorist financing.

CRBR will serve as a register of the UBOs, which refers to individuals exercising decisive control over a given company. It results from EU legislation that each EU member state should collect information on beneficial owners and is obliged to provide full insight to the authorities when necessary.

Since the register will be mandatory and public, which means available to all citizens, the fight against corruption should become more manageable. Obligatory registration forces company owners to report crucial information (which dishonest entrepreneurs would normally want to hide). It will also be more difficult to cover up the identity of the UBOs in a complex corporate web of associations.

The register will contain the UBOs of the following types of companies:

  • general partnership,
  • limited partnership and limited joint-stock partnerships,
  • companies with limited liability,
  • regular joint-stock companies,
  • simple joint-stock companies (from March 1st, 2020),

How to identify the Ultimate Beneficial Owners?

The UBO is defined as a person employed in the company that has (resulting from legal or factual circumstances) decisive influence on decisions and actions taken by the company. The control over individual transactions or establishing new business relations with clients are also eligible.

Therefore, the UBOs mostly hold positions of the CEOs, members of the management board, or the supervisory board of a given company. If the legal entity is a trust, the UBOs are considered to be either the founder, trustee, supervisor, beneficiary of the trust, or a person who exercises control over the trust.

Reporting UBOs

The CRBR allows the submission via the e-PUAP system. The application can only be made by a person who, due to his position, can represent a given company. So, among others, the company’s president, a member of the board, or a person having an equal position. The law does not allow for the possibility of using proxies – which has already caused controversy among experts.

One of the possible ways to use the representative in the reporting process will be the ability to upload a previously prepared XML file containing all necessary personal data. Even then, at the final stage of checking and accepting the submission, board members will have to personally accept and sign the report.

Financial penalties & reporting issues

In general, the current regulations on the CRBR do not present solutions to many potential problems related to the language, accessibility or nationality of UBOs. To add information to the CRBR, it is necessary to have a PESEL (Polish national identification number). This will establish a difficulty for companies with board members that are not of Polish citizenship. The e-PUAP system also does not accept those qualified signatures in which the PESEL number has not been revealed (so e-signatures issued abroad are excluded).

Another problematic feature of the new regulations – according to many experts – may be the lack of a strict definition of the Ultimate Beneficial Owner. This is important because if a given UBO will not be registered – due to doubts concerning definition – the owners of a given company may get a penalty of up to 1 million PLN.

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ARPI Accounting is a part of ARPI Group, a Norwegian holding which started to operate in Poland in 2001.

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