A new legal basis for the Luxembourg Business Registers entity should improve transparency, justice minister Sam Tanson said on Wednesday Photo: Shutterstock

A new legal basis for the Luxembourg Business Registers entity should improve transparency, justice minister Sam Tanson said on Wednesday Photo: Shutterstock

Lawmakers on Wednesday started a process to reform Luxembourg’s business registers in a bid to make the tool more effective and transparent after the OpenLux revelations had revealed shortcomings in the system.

Luxembourg in 2019 under EU rules launched a beneficial owners register telling companies to file the details of the people who control or own the business. But the so-called OpenLux revelations last year showed that information is hard to access, for example as it does not allow searches by an owner’s name.

The beneficial owners register (RBE), together with the trade and companies register (RCS) and the electronic compendium of companies and associations (RESA) is grouped together in the Luxembourg Business Registers (LBR) entity, which is now set to receive a new legal basis.

Justice minister Sam Tanson (Déi Gréng) on Wednesday told lawmakers that the changes would give the LBR group more scope for action to ensure that information is up to date and accurate.

For example, if a company fails to respond to a request for information within one month, this will be flagged publicly online in a name-and-shame approach. The database should also be upgraded so that companies receive an automatic reminder when information is due, incurring a fee for records that are submitted late.

It’s necessary to invest into the platform, the director of the LBR told members of parliament, according to an official statement, also as international standards keep changing and globally compliance by companies remains unsatisfactory.

Transparency International together with the Anti-Corruption Data Collection at the time of the said that around 80% of private investment funds in Luxembourg didn’t declare who benefits from them and that more than 15% of those funds submitted conflicting information to different authorities.

The business register enabled the consortium behind OpenLux to access information in the ledger freely but it also raised doubts about the ability of Luxembourg authorities to spot and pursue shady dealings. At the time, Tanson said that the justice ministry’s financial intelligence unit had received a list of around a dozen people with questionable records as a result of the investigation.

Members of parliament on Wednesday said they would discuss the state council’s opinion in a next step as the draft law makes its way through parliament before coming to a vote.