Companies are increasingly confronted with situation where banks, insurers, leasing and factoring companies challenge their entries concerning beneficial owners reported to the Central Register of Beneficial Owners (CRBO). Detection of irregularities is threatened not only by inspection, but also high financial sanctions, criminal liability or blockage of a bank account.
The beneficial owner is a natural person exercising, directly or indirectly, control over an economic operator concerned. As of 13 October 2019, companies are required to collect and report information on beneficial owners to the CRBO. This obligation applies to most companies and partnerships, including limited liability companies, joint stock companies (except public companies), general partnerships, limited partnerships, limited joint-stock partnerships, simple joint-stock companies (PSA) and European companies.
Newly established companies have 7 working days from the date of entry to the National Court Register to make an entry. The same deadline applies for notifying changes and is counted from the date of the event justifying the change (for declaratory entries) or from the moment of entry of the change in the National Court Register (for constitutive entries).
In October 2021, regulations obliging the obliged institutions to verify the correctness of entries in the CRBO came into force. To this end, the General Inspector of Financial Information (GIIF) recommends checking other publicly available sources apart from the CRBO, such as the National Court Register (KRS), articles of association or share transfer agreement.
In practice, the obliged institutions often limit themselves to comparing entries in the CRBO with the KRS, which raises numerous problems. First of all, the KRS may not contain data of all beneficial owners, as they do not always meet the requirement to be subject to such an entry. On the other hand, updating data in the KRS may take up to a few weeks, which may also contribute to possible discrepancies.
In companies with foreign capital, it may be helpful, and in some cases necessary, to obtain documents from foreign registers or other documents relating to foreign holding groups.
When discrepancies in beneficial owner’s data are found, the obligated institution should first attempt to explain them. Only if the irregularity is confirmed, is it necessary to report the case to the GIIF.
When the correctness of the CRBO entry is questioned, before taking any action, it is worth explaining what exactly is the source of doubts. It may be very helpful to document the activities related to making an entry in this register, so it is worth taking care of a detailed written description of the process and relevant documents. It is absolutely necessary to draw up a written documentation when members of the management board of a Polish company are reported as beneficial owners.
In the case of reporting to the CRBO beneficial owner’s data inconsistent with the facts or failure to update the required data, criminal liability or financial sanctions of up to PLN 1 000 0000 may be incurred. A financial penalty may be imposed directly on the company, but criminal liability is borne by natural persons acting on its behalf, usually the management board members.
A fine of PLN 50,000 may be imposed on beneficial owners who do not provide the obliged institutions with all the information and documents necessary to make or update the CRBO entry.
An inspection by GIIF or closure of bank accounts may be equally acute for businesses.
In order to protect against the risk of consequences of possible irregularities related to entries in the Central Register of Beneficial Owners, we recommend conducting an audit of procedures and documentation.
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