New obligations relating to ultimate beneficial owners

According to the Andorran Law 37/2021, of December 16, amending Law 14/2017, of June 22, on the prevention and fight against money or securities laundering and the financing of terrorism, specifically in art. 3.3, the ultimate beneficial owner is the natural person or persons who ultimately control the client and/or the natural person or persons on whose behalf a transaction or activity is carried out. Apart from the novelties in the definitions of beneficial owner established by the new Law and which can be consulted here, and the new Decree 214/2022, of 25 May 2022, amending the Regulations governing the registration and access to information on beneficial owners in the registers of legal entities, approved by the Decree of 5 September of 2018, published in the BOPA on June 1, 2022,this article will focus on the new specific obligations relating to beneficial owners.

In the first place, a new obligation appears for the regulated entities, consisting in the fact that when establishing a new business relationship with a company or other legal entity, or with a trust or a legal instrument of analogous structure or functions, which must obtain, keep and supply information regarding the beneficial owners, the regulated entities shall require proof from the competent Register of beneficial owners or an extract from it.

Likewise, in relation to the Register of Ultimate Beneficial Owners, specifically in the obligation to obtain, keep and access information on the Register of Ultimate Beneficial Owners, they will have the direct obligation to provide companies and other legal entities incorporated in the Principality of Andorra with all the information necessary for the fulfilment of their obligations, i.e. to obtain and keep their information accurate and up to date. In addition, the regulated entities and the competent authorities will also have the obligation – to the extent that it does not unnecessarily interfere with their functions – to inform the Registries of any discrepancy they observe between the information concerning the beneficial owner appearing in the Register and that available to them. If this happens, the relevant Registry will take appropriate steps to resolve it.

Another relevant novelty lies in the extension of access to information on the Ultimate beneficial owners recorded in the various Andorran Registries (Register of Companies, Associations and Foundations). Until now, applicants had to prove a legitimate interest. Access to this information is regulated by adding as applicants: obliged subjects, other persons who can prove legitimate interest, and persons requesting information related to trusts or similar legal instruments that are holders of controlling interests of legal entities. The limitation on these requests shall apply when such access may expose the beneficial owner to a disproportionate risk of fraud, kidnapping, blackmail, extortion, harassment, violence, or intimidation; or if he/she is a minor or incapacitated.

Aina Serret

Augé Legal & Fiscal