Portugal’s new legislation to ensure trading companies disclose information on ultimate beneficial owners (UBOs) was enacted in August 2017 and came into force the following November.

But now lawyers are saying that while the legislation is comprehensive, it may be rendered less effective by some very lenient penalties.

Reporting requirements

The types of entities required to register UBO information are far ranging and include associations, cooperatives, foundations, civil and commercial companies, Madeira Offshore Trusts, as well as any other entities subject to Portuguese or foreign law that do business in Portugal.

There is also now a requirement for commercial companies to keep and maintain an internal share ownership register. This should record sufficient, accurate and updated information on shareholders and their shareholdings, direct or indirect owners of shares and the identity of people with actual control over the company.

Acts of omission

But the law appears to deal with acts of omission leniently. If a company fails to provide UBO identification information, then no offence has been committed.

However, if UBO information is supplied and found to be false, then an offence is committed. In this context, lawyers say it seems better to remain silent than to lie.

Categories: Trade Based Financial crimes News