Taking ownership

Sara Drake, Chief Executive at The Chartered Governance Institute, comments on the new Beneficial Ownership Register coming into force in the Republic of Ireland.

It is always pleasing when the Institute is able to comment on topical governance matters, particularly when the media listens to what we have to say and helps to highlight our governance expertise. This was the case recently when the Irish region issued a press release about the new Beneficial Ownership Register that comes into force in the Republic of Ireland on 22 November in order to tackle white collar crime and specifically money laundering.

When we issued a warning on 14 November that many companies would fail to meet the deadline, just 23% of the 234,510 companies that are legally obliged to register their ownership details with the Companies Registration Office (CRO) in Dublin had done so. As of 20 November, that figure had risen to just 32%. This, despite the possibility of fines of up to €500,000 in the worst-case scenario and a custodial sentencing of up to 12 months for knowingly or recklessly providing false information to the Registrar.

Businesses being required to submit their beneficial owners’ details, including each beneficial owner’s name, residential address, nationality, date of birth, Personal Public Service (PPS) number and the nature and extent of their ownership or control, might sound simple. However, a litany of problems since the registration requirements were announced has impeded the process, including IT glitches and delays. The Institute had already highlighted an issue earlier in the year that might cause a delay regarding foreign domiciled company owners who did not have the required Irish PPS number. This issue was finally sorted by mid-October, but by that time a four-month-long backlog for that category of owner had been created.

There were still ongoing problems ten days prior to the 22 November deadline, with one in four registrations being rejected due to inconsistencies in the information supplied to the CRO. For example, a P J Murphy might be the owner of a company, but his official name is Patrick Murphy. Unless he uses the name Patrick on the register, the application is liable to be rejected. To make matters worse, when the owner and the advisor are then informed that the submission has been rejected, neither are told the exact reason for the rejection, thereby resulting in multiple filing attempts and frustration on the part of all parties.

In our press release we expressed the view that the debacle might have been caused by too many cooks spoiling the broth as there were a number of different stakeholders involved, including the Departments of Justice, Finance and Enterprise in Ireland. While the CRO has endeavoured to deal with issues and queries as they have arisen, it would appear to have had no input into the actual legislation or timelines imposed.

The timing of the deadline could not have been worse as November is already the busiest time of the year for companies’ annual returns filings. That, coupled with personal tax deadlines, has put huge pressure on advisors and their clients in term of trying to meet all the various deadlines.

Furthermore, despite the fact that the portal through which companies need to file their returns was not operational until the end of July, the Irish authorities have not yet opted to offer an extension to the deadline to register ownership. It is also unclear when fines or other penalties for late of non-registration will be imposed. This makes a difficult situation even worse for our members who are facing the wrath of company owners who are frustrated with the whole process.

One silver lining, however, is the media coverage that our release generated. Jillian O’Sullivan, a member of the Irish Council was interviewed on the radio by Newstalk’s Vincent Wall about the problems surrounding the new register and numerous media outlets, including RTE and the Irish Times, covered the story. This is great news in terms of bringing our expertise in international governance matters to the attention of the wider world. It also supports the work that we did in 2016 with the UK Government on the register of people with significant control – the PSC Register. The guidance that we produced then was invaluable in helping people to understand the new requirements, including recording control on the PSC register and protecting people at serious risk of harm.

The author of this article is Sara Drake, Chief Executive at The Chartered Governance Institute. 

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