Introduction of UBO registry in Aruba
July 27, 2022
On the 7th of July 2022, the draft National Ordinance to amend the National Ordinance of the Commercial register and the State Ordinance for the Prevention and Combating of Money Laundering and Terrorist Financing (AML/CFT State Ordinance) (LWTF), was adopted by the Parliament of Aruba. With this amendment, Aruba will comply with the international obligation to prevent and combat financial fraud, money laundering and terrorist financing.
Ultimate beneficial owners
With the introduction of the ultimate beneficial owners registry (hereinafter: “UBO- registry”), all UBO’s of companies established in Aruba (hereinafter: “companies”) and legal entities governed by private law, which according to their articles of association, have their office registered in Aruba (hereinafter: “legal entities”) are required to be registered in the commercial register at the Aruba Chamber of Commerce (hereinafter: “the Chamber”). UBO’s are the individual(s) who ultimately owns and/ or controls the company (shareholder of at least 25%) or makes binding decisions on behalf of the company, trusts or a similar legal constructions.
UBO-registry and access
The person(s) to whom the company belongs or the director(s) of the legal entity has to submit the UBO details. The Chamber will be responsible for the UBO-registry and will keep track of it. The Financial Intelligence Unit Aruba (FIU-Aruba), the Central Bank of Aruba (hereinafter: “CBA”) and competent authorities designated by National Decree (hereinafter: “competent authorities”) will have unlimited access to the UBO-registry. Service providers, such as lawyers, notaries, tax advisors or accountants, who according to the National Ordinance for the Prevention and Combating of Money Laundering and Terrorist Financing are required to do a customer due diligence, client identification and verification and the reporting of unusual transactions, will also have, upon request, limited access.
In the context of privacy, if a service provider requests access to the UBO-registry, the Chamber must register this together with a valid identification and, amongst other, a tax identification number of the requester. Furthermore, the Chamber must keep track of who requests information from an UBO and must provide to the UBO, upon his request, how often he has been searched in the UBO-registry by a service provider (FIA-Aruba, CBA and competent authorities are excluded). The name of the service provider(s) will not be disclosed to the UBO and the UBO-registry will not be public.
Obligation to report back
Competent authorities and service providers have an obligation to report back to the Chamber any discrepancy they find between the information about the UBO from the commercial register and information obtained by other means. This way the commercial register will stay accurate, up-to-date and complete. Note that for service providers this obligation is separate from the one already in place to report to FIU-Aruba in case of an unusual transaction.
Violation of the obligation to declare the UBO’s at the Chamber, may lead to an administrative or criminal penalty. Administrative penalties may be imposed in case of relatively easy to detect and minor violations (e.g. failure or late delivery of UBO details). Administrative penalties may be periodic penalty payments. Criminal penalties of maximum Afl. 100,000 may be imposed in case of aggravating circumstances (e.g. intentionally delivery of incorrect UBO details or a possible combination with other common fraud offences). In case the same violation is repeated within 5 years in respect of the same violation, the penalty amount may double. The FIU-Aruba, CBA, competent authorities and service providers are bound by a duty of confidentiality to not disclose any information regarding the UBO’s, unless required by law. Illegal disclosure of information may also result in a penalty of maximum Afl. 100,000 and if the same violation is repeated within 5 years in respect of the same violation, the penalty amount may double. The same penalties apply for service providers in case of failure to report back.
Existing companies after entry into force of the national ordinance:
- Foundations: the Chamber must register in the commercial register within six months after entry into force of the national ordinance, insofar it has not already been registered, UBO details appearing in the foundations register as declared in the commercial register.
- Associations with full legal capacity: will be summoned in writing to register in the commercial register.
- Associations without full legal capacity: the possibility to register will be made known.
- Companies and legal entities: must register and deposit the UBO details in the commercial register within 18 months after the entry into force.
New companies after entry into force of the national ordinance:
- Companies: the declaration of the first registration of the UBO details must take place within one week after the start of carrying out the business activities.
- Legal entities: the declaration of the first registration of the UBO details must take place within one week after the establishment of the legal entity.
- Trusts and similar legal arrangements: UBO details must be registered from the date after entry into force.
The UBO details will be accessible in the commercial register up to ten years after the deregistration of the legal entity.
Entry into force date
The aim is 1 January 2023.