About 40 percent of all companies and organizations have not yet declared their ‘ultimate beneficial owner’. As a result, some 700,000 owners remain under the radar. That is much more than expected. In a letter to parliament, Minister Kaag wrote that the number of missing names was estimated at 120,000.
Now that many more entrepreneurs are evading the registration obligation, there is not enough manpower to enforce the obligation. So choices have to be made, says Kaag. This means that priority is given to enforcement in sectors where the risks of money laundering and terrorist financing are highest.
Privacy lawsuit
Another factor is that a majority of the House of Representatives has requested only ‘risk-oriented enforcement’ pending a ruling on the UBO register at the European Court of Justice. That case concerns the question of whether the Luxembourg UBO register does not violate the right to privacy. Also Dutch entrepreneurs tried to block the register with this argument in vain.
As a result, the Dutch government is reluctant to impose fines and community service orders. Initially, the Economic Enforcement Bureau will send a warning letter to only 500 organizations that have not indicated their owner. These go, for example, to companies that trade in expensive goods or operate in an industry with a lot of cash.
A thousand more letters will follow next month. In the following months, two thousand letters a month are sent to the mailbox. At that rate, it will be nearly thirty years before all owners who now remain under the radar will receive a warning.
If, two weeks after the warning, a company still has not communicated a ‘ultimate beneficial owner’, the enforcer will call and inform the owner that the owner must be registered. If that still doesn’t happen, penalties can be imposed.
‘The world upside down’
For privacy organization Privacy First, the hesitant enforcement is one step too much. “We are against a public UBO register in principle. That is also what the European case is about. I understand that people wait to fill in until the European court provides clarity,” says lawyer Otto Volgenant, who conducted cases against the introduction on behalf of Privacy First. of the registry. “So wait with enforcement until the verdict is out.”
In this he has no accomplice in Jesse Renema, project leader at Open State Foundation. “The world is turned upside down. Privacy is being used as a smokescreen. Very little information about owners is publicly available in the UBO register. It has been agreed at European level that this is an important step in tackling money laundering and corruption. you have to deal with that too.”
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