Tanson (déi Gréng) on 21 February presented the details of a reform that will see the Luxembourg Business Registers group gain greater powers to oversee data submitted and clamp down on non-compliance.
“It’s extremely important that we have qualitative data in the LBR and the RBE,” Tanson said. The RBE is Luxembourg’s beneficial owners register, launched under EU rules in 2019 and detailing the people who own, control and benefit from a business.
The beneficial owners register, 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 entity, an economic interest group established between the Chamber of Commerce, the Chamber of Skilled Trades and Crafts, and the state.
More than 152,000 entities are registered with the LBR, filing around 354,000 documents as part of their company records in 2021.
While around 92.5% of companies have filed details for the beneficial owners register, the director of the LBR, Yves Gonner, could not indicate how many companies on the trade and companies register or elsewhere have fulfilled their obligations or failed to do so. “We don’t have precise information for the RBS,” he said. “We will review this as part of the monitoring.”
Gonner said that there are different criteria of assessment. “You can look at a series of information in the commerce register. You have to see what is decisive.”
“Change of paradigm”
The reform, which is set to conclude by the end of next year, also gives the register more powers to penalise businesses that haven’t submitted proper records.
The LBR will be able to name and shame companies that have failed to file proper documentation after receiving a warning from the LBR. It can impose fines of up to €3,500--reduced to €250 for charities and foundations--after repeated warnings, strike the company off the business register and, as a last resort, forward the matter to the public prosecutor’s office.
“Up until now, the LBR was there to register the data, not control it. That was never part of its mission,” Tanson said. Under the reform, the group will enhance its technology and internal systems to ensure that companies file consistent documents across different registers--the RCS and the RBE, for example. The reform, she said, is a “change of paradigm”.
The LBR will play a “more proactive role” in pursuing companies to update their information, the minister said, also as part of obligations towards international organisations such as the Financial Action Task Force (FATF), an anti-money laundering and anti-terrorist financing watchdog, or the OECD.
To fulfil its new mission, the LBR will roughly double its staff, from 25 to between 54 and 75 by the end of 2023, expecting to hire experts in data analytics, anti-money laundering and other areas.
No search by name
But while an overhaul of the website is also planned, to make it easier for users to access the information they are looking for, some search functions won’t be implemented.
A consortium of journalists working on the OpenLux revelations had trawled the database for information to dig up dodgy business dealings. They had criticised that it wasn’t possible to search the register by name, to get an overview of all the entities a person is associated with.
“That’s not foreseen,” Tanson said about adding this tool. “But I want to underline that the Luxembourg register is one of the most transparent you can find. I don’t think that you have this functionality in a lot of countries.”
A case is pending at the Court of Justice of the European Union by applicants who don’t want their data published. Exemptions are possible in case of exceptional circumstances or disproportionate risk, such as kidnapping. The defendants had invoked data protection concerns over their information being made publicly available in the register.
The LBR is self-financing and will cover the costs of the extra staff and technology upgrades through its own revenues, for example from company filings or fines, Gonner said, without revealing the price tag of the undertaking.