Following the implementation of the 4th Anti-Money Laundering EU Directive, from 1 January 2019 every legal entity registered in Lithuania must obtain, collect and register information about its ultimate beneficial owners and file it with the state register by 1 July 2019.
In accordance with the Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (4th Anti-Money Laundering Directive) since January 2018, ultimate beneficial owners have to be registered also in many Central and Eastern European countries, such as Austria or the Czech Republic. As of 1 January 2019, also all companies registered in Lithuania must obtain, collect and register information on their ultimate beneficial owners with the Information System on Participants of Legal Entities (JADIS) by 1 July 2019.
The obligation to disclose information on the ultimate beneficial owners to JADIS arises from implementation in Lithuania of the 4th Anti-Money Laundering Directive. Accurate and up-to-date information on ultimate beneficial owners is considered to be a key measure in combating potential misuse of the corporate veil by hiding the true identities of persons behind corporate structure.
Ultimate beneficial owners – persons who own or control the company
Ultimate beneficial owner is deemed to be a natural person who owns or either directly or indirectly controls the company or otherwise exercises control over the company. Direct ownership implies a shareholding of 25% plus one share or an ownership interest of more than 25% in an entity. Indirect ownership occurs when one or more legal entities, under the control of the same natural person, holds 25% plus one share or an ownership interest of more than 25% in another legal entity. Further, the ultimate beneficial owner of the company is considered to be a natural person who holds the position of senior managing officer in an entity if neither direct nor indirect control has been established or doubts arise as to whether a person identified is the ultimate beneficial owner.
Ultimate beneficial owners in trusts
In the case of trusts, the ultimate beneficial owner is considered as any of the following: the settlor, the trustee(s), the protector, if any, the beneficiaries or persons in whose main interest the legal arrangement or entity is set up or operates, or any other natural person exercising ultimate control over the trust by means of direct or indirect control. Lastly, in the case of legal entities such as foundations and legal arrangements similar to trusts, the ultimate beneficial owner is the natural person holding equivalent or similar positions to those identified as ultimate beneficial owner in trusts.
Filing information with JADIS
Information about ultimate beneficial owners must be filed with JADIS by all legal entities having their registered office in Lithuania. By way of derogation, no obligation arises to publish data on JADIS for legal entities whose owner (sole participant or shareholder) is either the state or a municipality. The obligation to file data with JADIS lies with the managing director (CEO) of the undertaking. Any change in the data must be filed with JADIS within 10 days.
The sanction for failing to file data about ultimate beneficial owner or for providing incorrect and/or incomplete information varies from EUR 30 to EUR 1,450 and is imposed on the managing director (CEO) of an entity.