Minister of Finance Martin Helme (EKRE) finds that the true beneficiaries register is not working and its data entry in the business register has no legal weight.
Answering Reform Party MP Jürgen Ligi's written question regarding anti-money laundering efforts, Helme admitted, among other things, that the true beneficiaries register is not working in Estonia.
"First of all, Estonian words "tegelik" (true) and "kasusaaja" (beneficiary) are misleading in terms of the directive's goals and have caused plenty of interpretation issues for determining "beneficiaries" of NGOs, foundations and government and local government agencies. It is difficult for the ordinary person to understand what it means that the "true beneficiary" of AS Eesti Energia is the finance minister or that a trustee in bankruptcy can be the "beneficiary" of a bankrupt company," Helme wrote.
The finance minister added that a more serious problem with the register is that since no agency currently regards itself as responsible for verifying the data entered, the true beneficiary data entry in the business register has no legal power.
"The register simply displays names persons have entered. The result is that representatives of legal persons must fill out the beneficiaries' form every time their clients open a bank account or perform notarial acts because obligated persons cannot trust the register and need to double check the information every time," Helme wrote.
Introducing actual verification of register data would require agency-level reorganization and additional funding and would only be feasible in cooperation with other ministries.
Helme said he has come to believe the subject matter of the true beneficiaries register requires longer preparation as a separate bill, which is why such provisions need to be left out of current anti-money laundering draft legislation soon to be sent out for coordination.
Bar association critical
ERR wrote in August that the Estonian Bar Association's commercial law committee has made a proposal to the Ministry of Finance to amend the true beneficiaries system to reduce confusion and red tape.
The association described as illegible the ministry's recent interpretation according to which the beneficiaries of a city or rural municipality are its mayor and members of city or rural municipality government. The bar association suggested waiving determining true beneficiaries in such cases or creating an additional option.
The Estonian Bar Association finds that an entry suggesting there are no beneficiaries should be put in place instead of designating board members as beneficiaries in cases where business entities lack true beneficiaries or where they cannot be determined.
From Sept. 1, 2018, all legal persons registered in the Republic of Estonia must publish in the business register information concerning their true beneficiaries in regard to physical persons who own the company either directly or indirectly or exercise control over it in other ways.
Editor: Marcus Turovski