Swedish Parliament has passed a new law concerning registration of beneficial
owners (Sw. Lag (2017:631) om registrering av verkliga huvudmän), an
implementation of the Fourth Anti-Money Laundering Directive, which entered
into force on 1 August 2017. The purpose of the law is to increase the
transparency regarding the ownership and the control of companies, associations
and other legal entities in order to prevent money laundering and terrorist
financing. The law prescribes, in essence, that legal entities are obligated to
notify the Swedish Companies Registration Office who their beneficial owners
have to register beneficial ownership?
to register beneficial ownership comprises Swedish legal entities, foreign
legal entities operating in Sweden and natural persons with domicile in Sweden
who administer trusts or similar legal constructions. Exempted from the
obligation are the government, county councils and municipalities as well as
legal entities over which these have a significant control, limited companies
with voting shares admitted to trading on a regulated market within the EEA or
a equivalent market outside the EEA, as well as estates of deceased and
Who is a
owner is a natural person who, alone or together with someone else, ultimately
owns or controls a legal entity, or a natural person who benefits from someone
who is acting on his or her behalf.
cases, a natural person is assumed under the law to exercise ultimate control
of a legal entity. Examples are when the person due to his or her shareholding
or membership controls more than 25 per cent of the total number of votes in
the legal entity, when the person has the right to appoint or resign more than
half of the legal entity’s board members or corresponding management or when a
person is able to exercise equivalent control through agreements with the
owners, members or the legal entity, or through the provisions in the articles
of association, through shareholder agreements or similar documents.
obligations will be imposed on the legal entity?
The new and most
significant obligations for legal entities are that they must obtain reliable
information on who their beneficial owners are and the nature and extent of the
beneficial owner’s interest in the legal entity which must be submitted to the
Swedish Companies Registration Office.
information on beneficial ownership is missing or if reliable information
cannot be obtained, the legal entity must nonetheless provide information about
the lack of information. The legal entity must, at the request of an authority,
provide without delay information about its beneficial owners and documentation
on the investigation made to assess the beneficial ownership. The legal entity
must also notify the Companies Registration Office without delay of any change
in beneficial ownership.
happens if the notification is not submitted?
notification is incomplete, not submitted or contains incorrect information,
the Swedish Companies Registration Office may impose a conditional fine on the
legal entity, the managing director, a board member or other equivalent executives
to submit a notification. The same applies to a refusal of disclosure to an
authority. If the injunction is not complied with, the Swedish Companies
Registration Office may impose the fine. Thereafter, the Swedish Companies
Registration Office may impose a new increased conditional fine.