Obligation to comply with the provisions of the Law on Central Records of Beneficial Owners
On October 1, the application of the Law on Central Records of Beneficial Owners[1] began, introducing significant novelties in the current system of recording information on beneficial ownership and control over companies and other entities registered in the Republic of Serbia. The aim of the Law is to obtain and store adequate, accurate and current information on ownership structures in order to improve the existing system of detection and prevention of money laundering and terrorist financing, as well as harmonization of domestic legislation with international standards in this area[2]. In the following, we will present the most significant changes to the current legal solution.
Expanding the group of registered entities, which are subject to the obligation
to determine and record beneficial owners, as well as the basis for recording
The obligation to determine and record beneficial owners will apply not only to the previous subjects of this obligation:
– companies, except for public joint stock companies;
– cooperatives;
– branches of foreign companies;
– business and other associations (except political parties, syndicates, sports organizations and associations, churches and religious communities);
– foundations and endowments;
– institutions;
– representative offices of foreign companies, associations, foundations and endowments,
but also to trusts[3] or similar legal relationships that are managed from the Republic of Serbia, or that carry out transactions or cash transactions with legal or natural persons on the territory of the Republic of Serbia.
This also expands the scope of recording bases. In addition to the registration of a registered entity in the competent register, as a basis, i.e. changes in the ownership structure, members of bodies and other relevant changes of a registered entity, the basis for recording is the management from the Republic of Serbia of a trust, i.e. a legal relationship similar to a trust, as well as corresponding transactions.
Extending obligations of registered entities
The recording of data on the registered entity in the Central Records is performed by the Registrar, based on the data received from the competent state authorities.
The authorized person of the registered subject must:
– to record information about the real owner: the extended circle of identification data, as well as the basis for acquiring the beneficial ownership over the registered entity, the date of acquiring the beneficial ownership, as well as the date of recording data and documents. This recording is done indirectly through the user application (via the website (portal) of the Serbian Business Registers Agency),
– to simultaneously upload the documents on the basis of which the real owner was determined.
This obligation also applies to all registered entities, which, in accordance with the previous law, have already recorded the real owners.
Updating beneficial owner information
Registered entities are obliged to record changes in the ownership structure and members of the bodies of the registered entity, as well as other changes on the basis of which the fulfillment of the conditions for acquiring the beneficial ownership can be assessed within 30 days from the date of this recording basis arising.
Obligation to annually check the recorded data on the beneficial owner
The registered subject, i.e. the authorized person, is obliged to:
– to check whether the recorded data on the beneficial owner are accurate and up-to-date, within one year from the date of the last recording of data on the beneficial owner, i.e., from the date of the last confirmation of the accuracy and up-to-dateness of the recorded data on the beneficial owner and
– to confirm that the recorded data on the beneficial owner are accurate and up-to-date, within a further period of 30 days.
Deadlines for recording the beneficial owner in the Central Records
The deadlines for recording the beneficial owner of a registered entity have been extended from 15 to 30 days from the day of establishment, i.e., the day of the recording basis arising.
Adjustment deadlines for existing registered subjects
Existing registered entities are obliged to comply with the provisions of this law within 60 days from the date of its application, that is, until November 30, 2025.
List of registered entities that did not record the beneficial owner in the Central Records
The Serbian Business Registers Agency will compile and publish on its website (portal) a list of registered entities that do not register the beneficial owner in the Central Records within the prescribed time limits.
Penalties
A person who, with the intention of concealing the beneficial owner of a registered entity, a trust or a legal relationship similar to a trust, does not record information about the beneficial owner in the Central Records, records false information about the beneficial owner as true, changes or deletes true information about the beneficial owner, can be punished by imprisonment ranging from six months to five years.
Failure to register or update beneficial owner information may result in monetary fines of up to EUR 17,000 for legal entities and up to EUR 1,200 for responsible individuals.
The novelty is also the introduction of the possibility of imposing protective measures, namely on a registered entity – protective measures prohibiting the performance of certain activities, and on the responsible person in the registered entity the prohibition of performing certain operations in a legal entity, for a period of six months to three years, counting from the date of finality of the judgment.