After more than one year of operations, the rate of filings at the Albanian register of ultimate beneficial owners (UBO Register) has been relatively low, especially by businesses that existed prior to the establishment of said register.
The low level of compliance was mainly due to technical difficulties in the functioning of the register and poor understanding of the new obligations by the reporting entities.
The rate of reporting was further affected by the high level of the fines applied for failure to comply with the reporting obligations, coupled with the requirement to prepay the fines before correcting the situation.
With the aim of facilitating the process of declaration of beneficial owners and to boost filings by the reporting entities, on 27.01.2022 the Albanian Parliament has enacted law no. 6/2022, which introduces relevant changes to the law no. 112/2020 on the UBO Register, with effect from early March 2022.
To achieve the aim, the enacted amendments provide that in relation to existing businesses that are directly controlled by one or more natural persons, the obligation to perform the initial registration at the UBO register will be completed ex-officio, through the transfer of data already available in the commercial registry. These businesses will have the right to correct the transferred data without incurring into fines.
With respect to existing business with indirect ownership as well as for other reporting entities (i.e. NGOs), the enacted amendments offer a grace period until 30/06/2022 within which the situation may be corrected without further fines applied to date for failure to perform the required filings will be forgiven sanctions.
Further, all fines applied prior to the entry into force of law no. 6/2022, for failure to perform the required filings under the law on the UBO Register will be forgiven, and those reporting entities that have already paid fines will have the opportunity to apply for reimbursement.
The enacted amendments offer novelties also with respect to the obligations applicable for reporting entities that will be established entry into force of law no. 6/2022.
As such, new business entities that will be incorporated following to the entry into force of the enacted amendments shall be required to submit their application at the UBO Register, jointly with the application to register the entity at the commercial register.
Other reporting entities (i.e. NGOs) that will be incorporated following to the entry into force of the enacted amendments are required to submit their application at the UBO register by no later than 40 days after their incorporation.
Term to correct
Finally, to facilitate the process of declaration of beneficial owners, in case of incomplete applications the enacted amendments introduce the possibility for the UBO Register to suspend the process and grant a 30 days term for corrections, instead of outright refusing the application.
Other relevant provisions of the enacted amendments relate to the escalating level of fines. As such, the fines for failure to comply with the reporting obligations at the UBO Register will start at a relatively low level, and shall be increased based on further delays.