On 29 July 2020, the Albanian Parliament adopted the Law no.112/2020 on “Beneficial Owners’ Registry” (the “Law”). The Law was published in the official gazette no.149, dated 13 August 2020 and enters into force on 28 August 2020.
The Law provides a new definition of beneficial owner and governs the establishment, functioning and administration of the Beneficial Owners’ Registry, determines the obliged entities which must register their beneficial owners, the procedures for registration and storage of beneficial owners registered data as well as the penalties applicable in case of failure to register the beneficial owners.
Beneficial Owner definition
Under the Law, “Beneficial Owner”, means the individual who ultimately owns or controls the entity and/or the individual on whose behalf a transaction or activity is being conducted and includes at least:
1.1 in case of legal entities
1.1.1 the Individual who ultimately owns or controls a legal entity through direct or indirect ownership of at least 25% of the shares or voting rights or ownership interest in that entity, including through bearer shareholdings, or through control via other means, or benefits from the transactions conducted by the legal entity on his behalf
1.1.2 The founder or legal representative or the individual who exercises the ultimate effective control in the administration and supervision of non-governmental organizations (NGOs) where are included foundations, associations, centers, as well as branches of NGOs. Ultimate effective control is the relationship by virtue of which a person:
a) determines the decisions taken by the NGO;
b) controls in whatsoever manner the election, appointment and dismissal of majority of decision making bodies and/or executive bodies of the NGO.
1.2. in case of trust and other legal arrangements:
1.2.1 the settlor, the trustee, the protector, if any, and the beneficiaries, or where the individuals benefiting from the legal arrangement or entity have yet to be determined, the class of persons in whose main interest the legal arrangement or entity is set up or operates; any other natural person exercising ultimate control over the trust by means of direct or indirect ownership or by other means.
The Law is applicable to the following reporting entities registered in Republic of Albania:
Beneficial Owners’ Registry
Under the Law, the Ministry of Economy shall establish the Beneficial Owners’ Registry not later than 31st January 2021.
The Beneficial Owners’ Registry shall be kept and administered by the National Business Centre. The latter shall be responsible for the following:
Obligations to register the beneficial owner
Under the Law the reporting entities must maintain and store appropriate, accurate and updated accompanying data and documents on the basis of which the beneficial owners of the entity and the type of control (i.e. direct or indirect control) are determined.
The reporting entities must not later than 31st December 2020 identify the Beneficial Owners as well as must establish and keep relevant documents on Beneficial Owners.
Once the Beneficial Owners’ Registry is established, the reporting entities which are registered with the Commercial Register or NGOs Register before or on 31 January 2021 must register the requested data under the Law not later than 60 days from the Registry’s establishment date.
The reporting entities which will be registered with the Commercial Register or NGOs Register after 31 January 2021 must register their beneficial owners in the Beneficial Owners’ Registry within the following deadlines:
a) within 30 calendar days from the registration date of the reporting entity with the respective registry, in case of initial registration of beneficial owners;
b) within 30 days from the date of factual change, in case of registration of changes to beneficial owners data of reporting entities.
Penalties for non-compliance
Non-compliance with the above obligation within the statutory deadline shall be subject to penalties amounting to ALL 150,000 for individuals; whilst for legal entities shall range between ALL 250,000 to ALL 500,000 The penalties shall be doubled in case the contravention is repeated.
In addition to the penalties, the NBC and NGO Registry shall not offer any services to the non-compliant entity until payment of the penalty and completion of beneficial owner registration.
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