Register of Beneficial Owners (IT0059)

Background and objectives

The fight against money laundering and international terrorism are common objectives for all the world’s democratic countries. Not only the EU, but also the OECD (hence the most industrialized free market economies ) have set rules to make the life of money launderers and terrorists difficult. In particular, the latest EU Anti Money Laundering Directive (5th AMLD) focused on the transparency of data regarding beneficial owners. Full visibility must be given to the physical person who is the final beneficiary of transactions carried out. This is a major evolution of the system towards greater transparency for the market (meaning either consumers, businesses, or the entire economic system wishing to do business on ethical terms both as an administration and fiscal, investigation and judicial authority) and, at the same time, for professionals (including banks, insurance companies, professions, etc.) that, according to legislation, have to identify the beneficial owner before the requested transaction is carried out. Within the Italian legislation a special section of the register of companies was created. The register will include all beneficial owners of limited liability companies that, by definition, are included in the register of companies. The same register will also include the beneficial owners of private legal persons (included in prefectural registers) and trusts.

The main innovation is that the section can be accessed by anyone. There are no more limitations (as envisaged in the 4th AMDL) for entities holding specific functions (i.e. Police forces, magistrates) or interests (professions, banks). Anyone will be able to access the section on the Register of companies, out of personal curiosity, to “become familiar” with their contractor, because they are obliged by law (professions), for investigation. Clearly, transparency runs parallel to market protection and data sharing. The only exception is trusts’ beneficial owners. The Directive foresees a more traditional level of knowledge: open for those who have to investigate and cooperate; otherwise, the request is limited to those who can prove a legally protected interest.

The regulation of this complex systems ensures that the market can make fully informed choices thanks to the transparency offered by open government.
According to legislation, a beneficial owner is one or more natural persons who are the final beneficiaries of the transaction. For the purpose of implementing the above register, the legislation defines the various categories of potential beneficial owners, following a scrolling criterion. Firstly, these are the natural persons who own shares of the share capital (directly or through subsidiary or trust companies) amounting to over 25%; if no one reaches this limit, the beneficial owner is the person who controls the majority of votes in the ordinary shareholders’ meeting; if this is not the case, the person who controls enough votes to have a dominating influence, based on the existence of specific contractual provisions. If none of these conditions exists, it is assumed that it is the CEO (absolute presumption).

The main objectives to be achieved include:
- uploading the many data on beneficial owners in the section. Data are very complex due to the heterogeneity of requirements (companies already included in the Register of companies; legal persons already included in Prefectural Registries, unrecorded trusts);
- preliminary stocking of data in the section; the regulation sets a deadline for the addressees of the legislation (firstly, limited liability companies and cooperatives) listed in the register of companies have to communicate the name of the beneficial owner using the special digital forms developed in accordance with art. 20 of Legislative Decree 231 (see above). These data are uploaded in the relevant section of the register and are the starting point of the register itself at time t0. That is the beginning of the operational phase of the section of the register of companies that will be implemented following the modalities mentioned below:
- maintaining data already included in the section, updating them every time ownership changes;
- ensuring that the action is proportioned to the purpose (maximum transparency without imposing too many bureaucratic burdens on the obliged entities).

Commitments
This action aims at providing transparency on beneficial owners, to counter money laundering and prevent corruption. This action is implemented through:
- the adoption of technical standards and implementing regulations;
- establishing the register and constantly updating it.

While recalling that both the 4th and 5th AMLDs focus on customer’s responsibility as a key factor to verify beneficial owners, necessarily the content of the section has to meet the same principles. This implies that the system needs to have an internal control (at least for companies) to ensure consistency with the information contained in the register of companies. This is true for the number or responses obtained (while feeding the information) compared to the group of potential beneficial owners (information known to the office); information on proprietary assets is then crosschecked (the register of companies at least for limited liability companies contains updated information on beneficial owners holding over 25% of shares; this is more complicated for joint stock companies where the list of shareholders is a picture taken when the balance sheet is produced – art.2435 of the Civil Code – a picture which is doomed to rapid obsolesce).

The latest census by Unioncamere (31 December 2018) shows that in Italy 22% of companies is run by women. This figure is slightly growing compared to the past but is very telling. We should consider that this percentage (in absolute terms 1,337.000 business women) includes all Italian companies of all types, and all product markets. During implementation, we will collect data on the presence of women among the beneficial owners in the Register.

It would be pretentious to believe that this action is part of a policy to support female entrepreneurship. However, it will be interesting to assess (when the uploading phase is over) a new gender indicator which can provide new evaluation tools for economic policy-making and for gender equality in the business sector.

Lead Administration
Ministry of Economic Development (MISE) – Marco Maceroni

Other administrations involved
• Ministry of Economics and Finance (MEF), Unioncamere Monitoring contact person from the Open Government Forum Transparency International – Italia – Davide Del Monte

3. Register of beneficial owners

3. Register of beneficial owners

Completion: Limited

Milestones 3.1–3.5 (MISE, [46] MEF, [47] Unioncamere): This commitment sought to develop and implement a register of beneficial ownership.

The fifth EU anti-money laundering directive (5AMLD) was officially transposed to the Italian legislative system in October 2019 with Legislative Decree 125/2019. [48] Between December 2019 and February 2020, the Ministry of Economics and Finance (MEF) held a public consultation [49] on the text of the draft decree, [50] which outlined the characteristics of the proposed register. Civil society organizations made several recommendations stressing the importance of ensuring the register is accessible for free by all public administrations and, eventually, by the general public—two elements which were not foreseen by the draft. [51]

Several public bodies, including the Council of State, examined the draft decree as part of the legislative approval process. [52] The Council strongly criticized [53] several elements of the drafting process as well as the draft’s content. [54] Its opinion has effectively halted the process for creating the register. The MEF has been asked to provide a reasoned response to the Council’s criticism and to revisit the draft decree. This revision is ongoing and is expected to be finalized by 31 December 2021. [55]

The transposed 5AMLD is the only milestone completed as part of this commitment, as the other milestones are ongoing. [56] A representative of Transparency International Italy [57] confirmed that the process has stalled since the Council of State’s opinion, and it remains unclear if or how the text is being revised. She confirmed that, according to Unioncamere (who is responsible for hosting the register), the technical structure is ready, but its launch remains dependent on the approval of the draft decree.