Financial Crime World

Luxembourg’s Public UBO Register: A Step towards Transparency

In a significant move, Luxembourg has become one of the first European Union countries to establish a fully public and accessible Ultimate Beneficial Owner (UBO) register. This register allows for free online access without prior authentication or registration, making it possible for journalists, NGOs, and the general public to consult the data.

Key Features of the UBO Register

  • Completeness rate: The completeness rate of the UBO register is around 90% as of the end of 2020.
  • Accuracy concerns: Errors and inconsistencies seem to exist in the register, which has raised concerns about its accuracy.
  • Verification procedure: There is a procedure for verifying the accuracy of information on beneficial owners.

How the Register Works

The registered entity is responsible for providing adequate, accurate, and timely data, while the Luxembourg Business Register checks the submitted registrations against supporting documents attached.

Regulatory Requirements

  • AML regulations: Professionals such as lawyers, notaries, banks, and other entities subject to Anti-Money Laundering (AML) regulations cannot rely exclusively on the UBO register to identify beneficial owners.
  • Due diligence: They are required to conduct due diligence and verify the origin of funds throughout the duration of business relationships.

Exemptions

Exemptions to the public nature of the information entered in the UBO register can be granted on a case-by-case basis by the Luxembourg Business Register, but this does not exempt entities or individuals from AML checks.

Concerns and Discrepancies

  • Corruption cases: The use of the UBO register has raised concerns about its ability to identify beneficial owners involved in corruption cases or linked to organized crime.
  • Discrepancies with SEC IAPD: Discrepancies can exist between the number of beneficial owners listed in the UBO register and other sources such as the SEC Investment Adviser Public Disclosure (SEC IAPD).
  • Different definitions: This is due to different definitions of ultimate beneficial owners and varying ownership thresholds.

Conclusion

The RBE in Luxembourg is a beneficial ownership register that identifies individuals who are the ultimate beneficial owners of a company and/or holding a controlling interest, while the SEC IAPD provides information on investment advisors and stock brokers registered and supervised by the SEC. The two registers were designed for different purposes and do not hold the same information.