On May 11 the Parliament published a set of amendments to the anti-money laundering (AML) legislation. The main provision concerning CSOs is the redefinition of the beneficial owner. The new article (52), provides alternative definitions for different types of legal persons. According to the new provisions,
the notion of beneficial owner includes in the case of non-commercial organisations, the individual(s) who exercise ultimate control over the non-commercial organisation;
This replaces the previous single definition for different types of legal persons from the Law on preventing and combating money laundering and terrorist financing 308/2017, which provided that:
a beneficial owner is the natural person who ultimately owns or controls a natural or legal person or a beneficiary of an investment company or administrator of the investment company, or a person in whose name an activity is carried out or a transaction is carried out and/or who directly owns or indirectly, ownership or control over at least 25% of the shares or voting rights of the legal entity or over the assets under fiduciary administration;
The new definition in the case of CSOs does not provide enough details related to the specific non-commercial organisations: it is rather general and does not bring significant changes. CSOs are legally required to submit a declaration of their beneficial owner, who until now, was automatically assigned to the person holding the role of Administrator in the CSO.
Definition proposed by CSOs not included in the law
Earlier in 2023, in the public consultation of the amendments a group of CSOs, including representatives of the CSO Meter Hub and Advisory Board representatives, addressed the specificities of beneficial ownership of three forms of non-commercial organisations (public associations, foundations and private institutions). The joint opinion on the beneficial owner definition was submitted to the parliamentary commission to be considered before the second reading. They suggested that:
1. In the case of public associations, the data of the administrator or administrators of the association, or, at choice, the data of the members of the General Assembly of the Association is entered in the register of beneficial owners.
2. In the case of foundations and private institutions, the founder's data is entered, only if the founder has reserved the right to control the organisation. If the founder of the private institution or foundation has handed over control of the organisation to a Board, the data of the Board members or of the administrator is entered.
CSOs also requested that the registrar assigns the beneficial owner based on proposed definitions, without CSOs having to submit a declaration:
Non-commercial organisations are exempted from the obligation to submit to the state registration body the statement regarding the beneficial owner, if the data in the State Register regarding the beneficial owner have remained unchanged, and the quality of beneficial owner will be assigned automatically according to the provisions of the previous paragraph.
On March 13, 2023, CSOs representatives were invited in a consultation round over the definition of the beneficial owner for CSOs. However, the definition proposed by CSOs was eventually not included in the law. The amendments were adopted by the Parliament on March 30, 2023 and will enter into force on July 1, 2023.
Next steps
Based on the outcomes of the consultations, the Office for Prevention and Fight Against Money Laundering committed to address the definition proposed by CSOs in the subsequent normative acts. These should be adopted within 6 months from the date of publication of this law.