September 10, 2018

Are you a member of the board of directors of a nonprofit association or a foundation? Are you entitled to represent one? Or do you perhaps exercise control or are you affiliated in any other way? Be aware that, from 31 October onward, you might have to register certain data to the General Treasury Administration under a new Belgian royal decree of 30 July 2018 creating the Ultimate Beneficial Owner Register (UBO Register).

The creation of the UBO Register stems from two European directives preventing money laundering and terrorism financing and was transposed in the law of 18 September 2017 concerning the prevention of money laundering and terrorist financing. It concerns companies incorporated in Belgium, (international) nonprofit associations (NPAs) and foundations.

This legal alert focuses on the implications of the UBO Register for NPAs and foundations. Another legal alert comments on the implications of the UBO Register for companies.

Who is affected within NPAs and foundations? Who is considered a UBO?

Six categories are considered UBOs within an NPA or foundation:

  1. Natural persons holding a mandate within the board of directors of an NPA or foundation
  2. Natural persons entitled to represent an NPA or foundation, as provided by law or by the articles of association
  3. Natural persons in charge of the daily management of an NPA or foundation
  4. Natural persons who are founders of a foundation
  5. Natural persons in whose main interest an NPA or foundation has been founded or in whose main interest it is operating its activities
  6. Every other natural person who exercises ultimate control over an NPA or foundation, through any other means

The board of the NPA or foundation must report all required data about their UBOs to the General Treasury Administration (GTA) by 30 November 2018, via the online MyMinfin platform.

What data of the UBO must the NPA or foundation report?

The board of directors of the NPA or foundation must provide the GTA with the following information about its UBO. Noteworthy, however, is that for categories 1 through 4 and, to some extent, category 5, most of the information in the UBO Register is already available in public filings with the tribunal of commerce and/or by publication in the Belgian State Gazette (and thus accessible to any person), according to the Belgian law of 27 June 1921 concerning NPAs and foundations.

Name (i) and first name (ii)
Day (iii), month (iv) and year (v) of birth
Nationality or nationalities (vi) NA
Country of residence (vii) and complete address of residence (viii)
Date from which point onward the natural person became a UBO (ix) ✓ (indirectly on documents filed)
Identification number with the National Register (x) NA
Category or categories of UBOS the natural person belongs to, individually (xi) or jointly (xii) ✓ (indirectly on documents filed)
NA Place of birth

Hence, the implications of the UBO Register for (UBOs of) NPAs and foundations are rather limited. However, it should be noted that the scope of the royal decree is broader than the scope of the law of 27 June 1921, because under the royal decree, natural persons who exert control over an NPA or foundation and who fall under categories 5 and 6 will have their data reported to the GTA, whereas there was no such obligation under pre-existing Belgian law.

In some circumstances, however, UBOs can request the GTA to exempt certain data from registration. In that regard, the UBO will have to provide evidence of extraordinary and exceptional circumstances to justify such limitation, such as disproportionate risks; risk of fraud, kidnapping, blackmail, extortion, bullying, violence or intimidation; or when the UBO is an infant or a legally incapacitated person.

Access to the UBO Register, with regard to NPAs and foundations

Data about the UBOs of NPAs or foundations can be accessed by:

  1. The competent authorities (including the Belgian tax authorities).
  2. Entities such as the National Bank, financial institutions, insurance companies, notaries, accountants and lawyers.
  3. Any other person or organization with a legitimate interest relating to the prevention of money laundering or the finance of terrorism. Access will be limited to data listed in items (i), (iv) through (vii), (xi) and (xii).
  4. Any other person who submits a written access request to the GTA for NPAs, foundations or similar legal entities that exert control over a company, NPA, trust or foundation. Access will be limited to data listed in items (i), (iv) through (vii), (xi) and (xii).

Access by natural persons to the UBO Register can be summarized as follows:

  NPA or foundation that does not control another legal entity NPA or foundation that does control another legal entity
Competent authorities Unlimited access Unlimited access
Entities listed by article 5 §§ 1 to 4 of the law Unlimited access Unlimited access
Natural person or organization with legitimate interest (supported by documentation) Limited access Limited access
Natural person without legitimate interest No access Limited access upon written request

Sanctions: personal liability of directors

The Minister of Finance has authority to impose administrative fines on directors of legal entities that do not comply with their reporting obligations. Fines may vary from 250 to 50.000 EUR. A court may also impose a criminal fine ranging between 400 and 40.000 EUR. Besides, the directors or governing bodies remain subject to the ordinary liability regimes in cases of noncompliance with the Belgian Company Code or the law in general for what regards compulsory filings and publications already in force.

Is the board of directors still obligated to keep a list of its members?

Yes. Legal obligations or formalities provided for by other legislative documents are not affected by the 18 September law or 30 July royal decree.

For any further question, please contact the following persons:

Hubert André-Dumont, Partner: [email protected]
Timothy Speelman, Partner: [email protected]
Nathalie Locht, Associate:[email protected]
Frederick Geldhof, Associate: [email protected]