home All hormones What is the difference between a beneficiary and an affiliate? Beneficiary: what is this? In simple words about complex things. Examples and description

What is the difference between a beneficiary and an affiliate? Beneficiary: what is this? In simple words about complex things. Examples and description

At the end of June 2013, Federal Law No. 134-FZ dated June 28, 2013 “On Amendments to Certain Legislative Acts of the Russian Federation in Combating Illegal Financial Transactions” (hereinafter referred to as Law No. 134-FZ) came into force. This law affected more than twenty existing regulations, including amendments to the Federal Law of August 7, 2001 No. 115-FZ “On Combating the Legalization (Laundering) of Proceeds from Crime and the Financing of Terrorism” (hereinafter referred to as Law No. 115FZ). The most discussed new norm is the emergence of an obligation for companies to provide information about beneficial owners upon the bank's request. The inclusion of this provision in national legislation is associated with recommendations prepared by the Financial Action Task Force (FATF) and strongly recommended for UN member states, including Russia. This is stated in UN Security Council Resolution No. 1617 (2005).

Banks have already begun to apply the new provisions, although with caution, since there are still no clarifications from the Bank of Russia and Rosfinmonitoring. For example, banks are already sending letters to clients demanding that beneficial owners be disclosed. There have also been cases of refusals to open a bank account due to failure to provide this information.

Beneficiary disclosure

Before amendments to Law No. 115-FZ, banks requested information only about the clients themselves and their beneficiaries. According to the new rules, they are also obliged to take reasonable and accessible measures in the current circumstances to identify the beneficial owners of their clients (paragraph 14, article 3, subparagraph 2, paragraph 1, article 7 of Law No. 115-FZ). Rosfinmonitoring can at any time request from the bank information about the beneficiaries of a particular client, and the bank is obliged to provide this information (subclause 5, clause 1, article 7 of Law No. 115-FZ). Otherwise, he faces a significant fine - from 300 to 500 thousand rubles (Part 2.3 of Article 15.27 of the Code of Administrative Offenses of the Russian Federation).

Law No. 115-FZ names not only banks, but also other organizations that carry out transactions with funds or other property as persons who have the right to demand disclosure of beneficial owners. These include any credit organizations, insurance companies (except for those that work exclusively in the field of health insurance), pawnshops, leasing companies and professional participants in the securities market, etc. (Article 5 of Law No. 115FZ).

In this regard, bank clients are obliged to provide, at the bank’s request, information about their beneficiaries (clause 14 of article 7 of law No. 115-FZ). But the problem is that neither Law No. 115-FZ nor any other legal act contains a list of measures that can be considered reasonable and accessible. Therefore, there are certain difficulties in understanding what measures banks need to take to identify the client’s beneficiary in order to avoid penalties, and what information needs to be submitted to Rosfinmonitoring if it requests this information. Now Law No. 115-FZ, as amended, provides that the volume, nature and procedure for banks to provide information on beneficial owners is established by the Bank of Russia. But at the moment such an order has not yet been established. Nevertheless, the Regulation on the identification of clients and beneficiaries by credit institutions for the purpose of combating the legalization (laundering) of proceeds from crime and the financing of terrorism, approved by the Bank of Russia on August 19, 2004 No. 262-P, is now in force. Of course, it refers to providing information only about the client and the beneficiary. But in the absence of any other clarification, this provision can be taken as a guideline in order to at least roughly understand what documents the bank may require.

“The new concept should include only the ultimate owners of the business”

What was the purpose of introducing the concept of “beneficial owner” in Law No. 115FZ?
— Changes in terms of control on the part of the credit institution of the final recipients of funds are the result of a targeted long-term government policy to disclose information about major shareholders and beneficial owners of Russian large and medium-sized companies. Thus, the history of this issue began with the general concept of reforming and clarifying the concept of “affiliated entity,” which was set out in the Financial Market Development Strategy for 2006–2008, approved by Decree of the Government of the Russian Federation dated June 1, 2006 No. 793-r.

Do the banks themselves now have a clear idea of who should be understood as the beneficial owner of the company?
— To date, banking practice regarding an unambiguous interpretation of the concept of “beneficial owner” has not been formed. But it is quite obvious that the new legal term in its interpretation is significantly narrower than the original concept of “beneficiary”. Considering the practical side of the definition of the beneficial owner, enshrined in paragraph 13 of Article 3 of Law No. 115-FZ, within the framework of general standards of corporate governance in Russia, we can say that the new concept should include only the ultimate owners of the business who have a share in the authorized capital of the parent holding companies more than 25 percent, as well as owners of management organizations of clients - legal entities (paragraph 3, clause 1, article 69 of the Federal Law of December 26, 1995 No. 208-FZ “On Joint-Stock Companies”, Article 42 of the Federal Law of February 8, 1998 No. 14 - Federal Law “On Limited Liability Companies”).

Do members of the board of directors automatically become beneficial owners just because they have some ability to control the actions of the company precisely because of their direct function?
— Automatically no, they don’t hit. Members of the board of directors can only be recognized as beneficial owners in certain cases. Until now, investment banking practice, when conducting Due Diligence of a client, followed exactly this path and requested, along with lists of affiliated persons, lists of participants (for limited liability companies), lists of registered persons in the register of shareholders (for joint stock companies) of clients, also protocols annual general meetings, as well as extraordinary meetings at which the current composition of the board of directors was elected (since previously it was necessary to identify the beneficiary, that is, the person for whose benefit the client of the credit institution acts). This was done to establish the affiliation of a member of the board of directors and the ultimate owners of the companies, since the concept of “beneficiary” can be interpreted much more broadly than “beneficial owner”. But you need to keep in mind that members of the board of directors are elected and accountable to the general meeting of participants (shareholders) and do not act on behalf of the company, but only participate in the internal management of the company, while monitoring the activities of the executive body (general director and (or) members of the board) . In other words, when determining beneficial owners, it is necessary to clearly understand that the degree of control of members of the board of directors over the activities of a company that is a client of a credit institution is always mediated by the will of the shareholders (participants) of the company.

Beneficial owner. To implement the requirements of Law No. 115-FZ, it now establishes the concept of beneficial owner.

WE QUOTE THE DOCUMENT

Beneficial owner is an individual who ultimately directly or indirectly (through third parties) owns (has a predominant participation of more than 25 percent in the capital) a client - a legal entity or has the ability to control the actions of the client (paragraph 13 of article 3 of law No. 115- Federal Law).

From this definition it follows that the beneficiary is considered not only certain participants (shareholders), but also persons not formally associated with the company who somehow control the actions of the client. In this case, not any participant (shareholder), but only that participant (shareholder) who owns a share (shares) exceeding 25 percent of the authorized capital can be recognized as the beneficial owner. For example, if in a limited liability company one participant owns 60 percent, and the remaining two have 20 percent each, then it is quite obvious that in this case the beneficiary will be the participant with a share of 60 percent.

Moreover, there are already banks that automatically recognize the general director as a beneficiary if nothing is indicated in the questionnaire in the “information about beneficial owners” column. Although there are those who consider each situation separately.

Also, the sole executive body of a legal entity can be recognized as the beneficial owner. This right is granted to the bank in the event that, as a result of all the measures taken, the beneficial owner cannot be identified (paragraph 5, subparagraph 2, paragraph 1, article 7 of Law No. 115-FZ). For example, if the company does not respond to the bank’s request to provide its beneficiaries. Or if the company has provided all the information, but it is impossible to identify the beneficiary. We are talking about a situation where, for example, a limited liability company has five participants, each of whom owns a share of 20 percent. In this case, none of them can be considered a beneficiary (since to be recognized as a beneficiary, the share must exceed 25 percent). Therefore, the bank can conclude that since it was not possible to identify the beneficiary after taking all possible measures, it is the sole executive body.

If the company does not fill out the column about beneficiaries in the questionnaire, then the bank can stop there (after all, it has taken all available measures to identify the beneficiary) and recognize the sole executive body as the beneficiary. But another option is also possible - the bank will notice that the chain of participation includes foreign companies, or will see other suspicious signs. Then he will use any methods to force the client to reveal the beneficiaries or change the bank.

Other controversial issues arise. For example, it is not clear who is considered the beneficial owner if one individual has a dominant participation in the capital of a legal entity, and another individual has the ability to control its actions. It seems more logical that the ability to control the actions of a legal entity is more significant for the purposes of combating the legalization (laundering) of proceeds from crime and the financing of terrorism, therefore the beneficiary can be considered the individual who controls the actions of the company. It is also not entirely clear whether a company can have more than one beneficial owner. In Law No. 115-FZ, the definition of a beneficial owner is formulated in such a way that one can draw the following conclusion: there should be only one. But then difficulties arise with determining the beneficiary in a situation where there are two individuals in the company and each of them has a share of participation (indirectly) in the capital of 50 percent.

Risks when disclosing beneficiaries. Some companies do not have any risk in providing information about beneficial owners. In particular, if they are participants (shareholders). In this case, there is nothing to hide, since such information is already known to the bank. It’s another matter if the company uses various tax planning schemes with the participation of companies located in offshore zones. There is a risk that at some stage tax legislation may limit the use of bilateral double tax treaties. And this trend can now be seen in many countries, including Russia. In this case, the tax authorities will be given access, for example, to information accumulated by banks regarding the beneficial owners of clients. Then companies using so-called tax planning (and perhaps not only them) may overnight lose all the benefits of the scheme they have implemented, which involves the use of a large number of foreign companies.

True, it must be taken into account that the bank is obliged to maintain bank secrecy and does not have the right to transfer information about the client, and therefore about its beneficiaries, to third parties (clause 1 of Article 857 of the Civil Code of the Russian Federation). Information containing bank secrecy is subject to disclosure only in cases prescribed by law.

Also, disclosing beneficial ownership information could potentially make companies worse off in some legal cases. In particular, in the context of bankruptcy of controlled companies. The fact is that the term “person controlling the debtor”, used in the Federal Law of October 26, 2002 No. 127-FZ “On Insolvency (Bankruptcy)” (hereinafter referred to as Law No. 127-FZ), is generally similar to the concept of “beneficial owner” , used in law No. 115-FZ. The only difference is that Law No. 127-FZ establishes a higher ownership threshold (50 percent) as a determining factor for the presence of control. If the court hearing the bankruptcy case is provided with a bank questionnaire in which the client (the debtor in this case) indicated its beneficial owners, as well as relevant supporting documents, this can serve as significant evidence of the existence of control of such persons over the debtor. And then there will be a risk that the debtor will be declared bankrupt as a result of the actions or inaction of the persons controlling the debtor (essentially, his beneficiaries), which threatens them with being brought to subsidiary liability for his obligations in the event of insufficiency of the debtor’s property (clause 4 of article 10 of law no. 127-FZ).

Beneficial Owner Identification Procedure

Law No. 115-FZ states that banks are required to take measures, including to establish information about beneficiaries, which are specified in subparagraph 1 of paragraph 1 of Article 7 of Law No. 115-FZ (on requesting information about the client and its beneficiaries). Thus, the bank has the right to request the following information about the beneficiary (individual): last name, first name, patronymic (unless otherwise follows from the law or national custom), citizenship, date of birth, details of the identity document, migration card data, document data, confirming the right of a foreign citizen or stateless person to stay (reside) in the Russian Federation, address of place of residence (registration) or place of stay, TIN (if available).

This is not the first time that some companies are faced with the requirement to provide information about the chain of ownership. Read more in the article “Features of contracts with state-owned companies. How to respond to the requirement to disclose beneficiaries” (No. 12, 2012).

Identification of clients' beneficiaries. Banks identify beneficial owners twice: before opening a bank account, and also during the next update of client information. During initial identification, that is, when a company contacts a bank to conclude a bank account agreement, the bank provides a questionnaire in which you need to fill out a column about the company’s beneficiaries. Based on this information, the bank will make a decision on opening an account.

If we are talking about an existing client of the bank, the bank is obliged to establish the beneficial owner of such a client at the next update of information about him. Such information updating is carried out at least once a year (subparagraph 3, paragraph 1, article 7 of Law No. 115-FZ). Thus, no later than one year from the date of entry into force of Law No. 134-FZ (that is, no later than 06/30/14), banks must complete the identification of the beneficial owners of their current clients. If the bank has doubts about the reliability and accuracy of previously received information, then it is obliged to send a request demanding that this information be provided within seven working days following the day such doubts arise (subclause 3, clause 1, article 7 of Law No. 115- Federal Law). For example, if he finds any of the transactions involving funds suspicious.

Cases when the bank does not identify beneficiaries. Law No. 115-FZ lists several cases when banks may not identify the beneficiaries of their clients. Firstly, if a client - an individual contacts the bank to make a payment or transfer (including electronic funds) in an amount not exceeding 15 thousand rubles, and also if he purchases or sells foreign cash for the same amount . Although this rule will not apply if a bank employee has suspicions that this operation is being carried out for the purpose of legalizing (laundering) proceeds from crime or financing terrorism (subclauses 1.1–1.4, clause 1, article 7 of Law No. 115-FZ ).

From the wording of paragraph 13 of Article 3 of Law No. 115-FZ, it follows that banks are required to identify the beneficiaries of not only companies, but also individuals - bank clients. After all, it talks about a person who controls any client (regardless of whether it is a company or an individual). Most likely, this was done intentionally: to prevent money laundering through fake individual entrepreneurs.

In addition, identification of beneficial owners is not carried out in the case of accepting clients who are state authorities or local governments, institutions under their jurisdiction, state extra-budgetary funds, state corporations or organizations in which the Russian Federation, constituent entities of the Russian Federation or municipalities have more than 50 percent of shares (shares) in the capital. Also, international organizations, foreign states and their administrative-territorial units that have independent legal capacity are not included in the identification. And also issuers of securities admitted to organized trading, who disclose information in accordance with securities legislation (subclause 2, clause 1, article 7 of Law No. 115-FZ). True, the same subclause provides for an exception - when Rosfinmonitoring sends a request to provide information about beneficiaries.

Risks of failure to provide information about beneficial owners

Law No. 115-FZ only provides for the client’s obligation to provide the bank with information about the beneficial owner. Neither administrative nor criminal liability has been provided for a client who has failed to fulfill such an obligation (there are no corresponding bills yet either). Despite this, companies face other risks of failing to disclose their beneficial owners.

Refusal to conclude a bank account agreement. If a company has just applied to the bank to start banking services, but has not indicated its beneficiaries in the application form, it may face the bank’s refusal to accept it for service. Thus, according to paragraph 5.2 of Article 7 of Law No. 115-FZ, the bank has such a right if there are suspicions that the purpose of concluding such an agreement is to carry out transactions for the purpose of legalizing (laundering) proceeds from crime or financing terrorism, and at the same time if such a possibility is provided for in the bank’s internal control rules. Naturally, we are talking about a case when the bank really has doubts regarding the activities of a potential client. The fact that, due to objective economic reasons, the bank is interested in opening an account for the client, allows us to conclude that banks are likely to resort to such refusals only if they really believe that servicing such a client creates a risk of sanctions being applied to the bank by regulatory authorities .

Refusal to make a payment. According to paragraph 11 of Article 7 of Law No. 115-FZ, the bank has the right to refuse to execute a client’s order to complete a monetary transaction in two cases. Firstly, if the documents necessary to record information in accordance with the provisions of Law No. 115-FZ are not submitted. Secondly, if, as a result of the implementation of internal control rules, a bank employee suspects that the operation is being carried out for the purpose of legalizing (laundering) proceeds from crime or financing terrorism. True, the bank will not be able to refuse to credit funds received to the account of an individual or legal entity. Thus, if the company does not provide information about the beneficiaries, there is a possibility that the bank will be able to use any of these grounds and refuse to carry out the client’s monetary transactions. Moreover, if during the calendar year the bank twice refused to carry out transactions with the client due to the client’s failure to provide documents required by the bank, then the bank has the right to terminate the bank account agreement with him (clause 5.2 of Article 7 of Law No. 115-FZ). But it seems that these will be extreme measures, given that it is not profitable for the bank to lose customers.

“Information about participants (shareholders) is not enough to determine the ultimate beneficiary”

The definition of beneficial owner, enshrined in Law No. 115-FZ, has long been known both to international financial practice and to Russian financial organizations, primarily banks. Some of them (primarily subsidiaries of foreign organizations) already require information about beneficial owners as part of the KYC (“Know Your Customer”) procedure. The Bank of Russia has also been requesting information about the beneficial owners of Russian banks for several years. Therefore, Russian banks definitely have a certain understanding on this issue. It is difficult to call it clear due to the vagueness of the wording “indirect possession” and, as a consequence, the inevitable ambiguity of its interpretation. But it is absolutely clear that information about the participants (shareholders) of the company, especially if they are legal entities, is not enough to determine the ultimate beneficiary. Members of the board of directors are also not automatically considered beneficial owners, since their ability to control the client’s actions is limited both by law and by the provisions of the constituent documents. Here we need to look at each specific case separately. Obvious situations of indirect participation in a company seem to be a chain of shareholding, confirmed by information from available sources - for example, trade and other registers and not encumbered, for example, by trust agreements. In practice, such obviousness in its pure form is rare - for example, if the chain ends with a public company and it is not possible to establish the final beneficiary. A more common situation is when individuals - the real owners of the business - are the beneficiaries of the trust.

What does it mean?

A beneficiary is a person who receives benefits, profits, and income from a business. This is what the final recipients of the payment are called. The meaning may vary depending on the situation.

Company Ownership

Most often, when opening enterprises, shareholders, directors, etc. are registered, but the names of the real owners remain unspoken. In this case, the beneficiary is the person who is actually the owner and receives the benefit and profit from the activities of the enterprise. This role can be played by an individual who, through participation in other companies or directly controls the shares of the enterprise. In this case, legal ownership can be assigned to other people or companies. Information about beneficiaries is confidential and is provided exclusively to the bank or registered agent.

Through the use of nominee directors and shareholders in offshore companies, it is often hidden who the ultimate beneficiary is. This scheme is most often concluded using a nominee agreement or a declaration of trust. Occasionally, a deed of trust is used.

Thus, the chain of ownership, including beneficiaries, rarely becomes public knowledge.

Owning a bank account

In this case, the beneficiary is the owner who has control over the assets or funds in this account. This person can indirectly or directly manage finances. Moreover, the concept applies exclusively to persons who have full control over these funds, even if the beneficiary does not directly perform any transactions, but they take place at his direction. When opening an account, credit institutions always request information about the ultimate beneficiaries.

Trust management

In this case, the beneficiary is the person who receives income from property transferred to trust management or given for use to third parties.

Insurance

In this case, the term is used in relation to the person who will receive the insurance amount. If a person has death insurance, the primary (or contingent) beneficiary can be any other person.

Inheritance

The beneficiary is the heir in accordance with the will.

Renting out property for rent

The term applies to an individual who receives or annuities.

Letter of Credit

If money is issued under a letter of credit, the beneficiary is the person in whose name the issuing bank opens it.

Opportunities and rights of beneficiaries

If a beneficiary owns shares in a business, he has the right to transfer his ownership rights to another person. The ultimate owner takes part in resolving issues relating to the authorized capital. The beneficiary also has an indirect presence at shareholder meetings. The owner can take part in choosing the board of the company.

An expert from the GARANT Legal Consulting Service talks about the methodology for determining the indirect participation of an individual in the capital of an organization in order to establish the possibility of recognizing him as a beneficial owner. Lyubov Karasevich.

Sometimes it is not so easy to determine whether an individual is a beneficiary of a particular joint stock company, but in some cases it is simply necessary to know this - including to comply with the requirements of legislation on combating money laundering. A special law, of course, determines who is the beneficiary of the company (Article 3 of the Federal Law of August 7, 2001 No. 115-FZ ""; hereinafter referred to as Law No. 115-FZ), however, this does not always help resolve the issue of the existence or lack of beneficiary status.

For example, one of the founders of a company (let's call it ZAO-1), owning 60% of its shares, is another company (ZAO-2), and the controlling stake in ZAO-2 belongs to an individual. Let's try to determine whether this individual is a beneficiary of ZAO-1

The concept of beneficial owner, as used in the law, is explained in this law. The beneficiary is an individual who ultimately directly or indirectly (through third parties) owns (has a predominant participation of more than 25% in the capital) a client-legal entity or has the ability to control the actions of the client.

In the situation under consideration, an individual owns 51% of the shares in ZAO-2. In turn, ZAO-2 is the owner of 60% of the shares in ZAO-1. Since an individual does not directly own the shares of ZAO-1, his participation in the capital of this company should be considered indirect. Taking into account the above explanations, we will calculate the share of indirect participation of an individual in CJSC-1. It will be: 0.51 x 0.6 = 0.306 or 30.6%. Consequently, an individual has a predominant participation in the capital (more than 25%) and meets the criteria of the beneficial owner of CJSC-1.

Please note that, in accordance with the law, a credit institution decides to recognize an individual as a beneficial owner if such person has the ability to control the client’s actions, taking into account the following factors:

an individual directly or indirectly (through third parties) has a dominant participation (more than 25%) in the client’s capital or owns more than 25% of the client’s total voting shares;

an individual has the right (opportunity), including on the basis of an agreement with a client, to exert direct or indirect (through third parties) significant influence on decisions made by the client, to use his powers in order to influence the amount of income of the client, an individual has the opportunity influence decisions made by the client on transactions (including those bearing credit risk (issuing loans, guarantees, etc.), as well as financial transactions.

The credit institution also has the right to determine other factors on the basis of which an individual will be recognized by the credit institution as the beneficial owner.

In December 2016, Federal Law No. 115-FZ dated August 7, 2001 “On combating the legalization (laundering) of proceeds from crime and the financing of terrorism” (hereinafter referred to as Law No. 115-FZ) was supplemented with Article 6.1. "Responsibilities of a legal entity to disclose information about its beneficial owners". Despite the fact that a year has passed since the innovations came into force, many companies have still not organized work to fulfill these obligations. Meanwhile, ignoring the requirements of the anti-money laundering law can lead to serious consequences. Fines for violations are draconian. For lack of information about beneficiaries, an organization may face a fine of up to half a million rubles. In this article we will describe the basic operating algorithms and give tips that can help avoid negative consequences.

Who is the Beneficial Owner?

In para. 13th century 3 of Law No. 115-FZ provides a clear definition of the beneficiary. When it comes to anti-money laundering, a beneficial owner is defined as an individual who ultimately directly or indirectly (through third parties) owns (has a predominant participation in) more than 25% of the capital of the organization or has the ability to control the actions of the client by others ways.

For your information

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Individuals, from the point of view of Law No. 115-FZ, “own” themselves, unless proven otherwise. Of course, the phrase: “the beneficial owner of... an individual is considered to be this person” causes a smile, but this is exactly how the law is formulated in an original way.

As you can see, the legislator has left a very wide field of activity for law enforcement officers. “Physics” can be recognized as a beneficiary both by one clear criterion (ownership of more than 25% in the authorized capital) and by the abstract “ability to control the actions of the client.”

Capital controls

Beneficial ownership may be direct or indirect.

With direct ownership, everything is relatively clear: if a “physicist” owns 25% of the shares (shares in the authorized capital), he is recognized as a beneficiary.

Example 1

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Shares in Romashka LLC are owned by two individuals, 50% each. Both of them will be recognized as beneficial owners.

With indirect control, things are somewhat more complicated. There may be many more options here.

Example 2

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Among the participants of Romashka LLC there is one individual (50% share) and two legal entities, each of which has 25%. However, 100% of the shares in both legal entities are owned by one individual. Accordingly, both “physicists” are still the beneficial owners.

Example 3

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More complex variations of indirect ownership are also possible, for example, by parents or guardians through a minor or incapacitated ward.

Example 4

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A group of relatives may be recognized as beneficiaries, although the share of each of them may be less than the control value. The logic in this case is quite simple - relatives have influence on each other, which means they can jointly exercise their rights.

The Sidorov brothers jointly control 40% of the shares in the authorized capital of Romashka LLC. They can also be jointly recognized as beneficiaries.

In general, the procedure for determining beneficial owners through direct or indirect ownership of a “share in a business” is intuitive. Much more questions are usually raised by “the ability to control the client’s actions.”

Other control methods

Law No. 115-FZ does not provide criteria by which the possibility of control could be established. Rosfinmonitoring tried to shed light on this issue in the information message “Typical issues of application of certain norms of the Federal Law of 07.08.2001 No. 115-FZ “On combating the legalization (laundering) of proceeds from crime and the financing of terrorism”” (no number and date) .

According to Rosfinmonitoring, beneficial owners include, firstly, persons holding management positions, for example the general director, members of the board of directors and the management board (directorate). These individuals conclude and approve transactions, that is, “have the opportunity to influence the decisions made by the client.” This category also includes individuals who manage the management company of the organization.

Example 5

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By the way, this is exactly the path the legislator took. If an organization for some reason cannot identify the beneficiary, it may be recognized as its general director (subparagraph 2, paragraph 1, article 7 of Law No. 115-FZ).

Secondly, a beneficiary can be recognized as a person who can use his powers to put pressure on the formal owners of the company. For example, the beneficiary may be the head of an organization that employs people who on paper are the owners of the company. Many entrepreneurs believe that registering a business as a driver or security guard will help them stay in the shadows. In fact, this approach is far from a panacea.

Thirdly, the beneficial owner may be a person who is able to influence decision-making due to family or friendly relations with formal managers or owners of shares in the authorized capital of the organization.

In general, from a practical point of view, the concept of “beneficiary” is very close to the tax concept of “actual recipient of income” (clause 2 of article 7 of the Tax Code of the Russian Federation). Ultimately, it is through the classic question of “who gets the bottom line?” and the beneficiary is determined.

Who is responsible for identifying beneficiaries?

The requirement to identify beneficial owners applies to almost all companies, regardless of their field of activity and legal form. Moreover, the law in this case does not distinguish between commercial and non-profit organizations. Which in itself is strange. After all, by definition, a beneficiary is a beneficiary. That is, the one to whom the business generates income. Therefore, in relation to non-profit organizations, such an approach seems strange. Thus, the founders of charitable organizations, due to the purposes of their creation, theoretically should not benefit from their activities. However, the law does not make any distinction in this case. All legal entities must collect information, with some minor exceptions.

There is no need to identify beneficial owners (paragraphs 2-5, subparagraph 2, paragraph 1, article 7 of Law No. 115-FZ):

institutions under the jurisdiction of state and municipal authorities;
state corporations or organizations in which the Russian Federation, constituent entities of the Russian Federation or municipalities have more than 50% of the shares (shares) in the capital. In this case, the beneficiary is already obvious;
issuers of securities admitted to organized trading who disclose information about the securities. These organizations are excluded from the list because they disclose this data at the request of other regulations (primarily Federal Law of April 22, 1996 No. 39-FZ “On the Securities Market”);
foreign organizations whose securities have undergone the listing procedure on a foreign exchange included in the list approved by the Bank of Russia. As in the previous paragraph, the requirement to identify beneficial owners is excluded as duplicating the more detailed requirements of other laws.

Who should I report to?

Information about beneficiaries may be requested by:

Federal Tax Service (FTS of Russia);
Federal Service for Financial Monitoring (Rosfinmonitoring).

The rules for presenting information were approved by Decree of the Government of the Russian Federation dated July 31, 2017 No. 913 (hereinafter referred to as the Rules).

The request can be submitted to the organization on paper or electronically. At the same time, Rosfinmonitoring uses the resources of the tax service to send requests electronically. In practice, requests are usually sent electronically through information exchange channels with the tax authorities.

The company must provide information about beneficial owners within five working days from the date of receipt of the request. Information is provided as of the date specified in the request. The response must be sent through the same channels through which the request was received. When receiving an electronic request, the response can be not only through channels of interaction with the tax authorities, but also on a physical medium (flash drive or disk). In the latter case, you will need a cover letter signed by the general director. Such a letter must be attached to the information carrier and submitted by courier or sent by registered mail.

The answer will not be accepted if:

the email message does not comply with the established structure and format;
there is no enhanced qualified electronic signature of an authorized person (or there is a signature of an unauthorized person);
there is no signature of an authorized person on the covering letter;
the optical or digital media is damaged, making its contents impossible to read (if responding to a request on paper).

If the message is not accepted, then after receiving the corresponding notification from the tax authority, the company will have exactly three working days to make corrections and resend the message.

What to report?

New Art. 6.1 of Law No. 115-FZ is called “Obligations of a legal entity to disclose information about its beneficial owners.” In accordance with it, companies are obliged to:

have information about your beneficiaries;
update this information regularly (at least once a year);
store information about beneficiaries for at least five years from the date of receipt;
disclose information about beneficiaries in reporting (when required by law).

The list of information about beneficiaries that the company must have is given in paragraph. 2 subp. 1 clause 1 art. 7 of Law No. 115-FZ. At a minimum, the following beneficiary information must be established:

Full name, date of birth, citizenship, TIN;
details of the identity document;
migration card data;
details of a document confirming the right of a foreigner or stateless person to stay (reside) in Russia;
address of place of residence (registration) or place of stay.

The legislation does not regulate the storage procedure and the procedure for sending requests to beneficiaries. Therefore, it can be approved by the company’s internal documents. It is also necessary to determine those responsible for this work.

Beneficiary search

So, the organization is obliged to take all measures to identify its beneficiary, and after identification, store information about him and regularly update the data. Let's look at how to do this using the example of business companies.

Essentially, the only way to obtain the data is to submit written requests to persons who may be the beneficial owners. Of course, the facts of sending and receiving a request by the addressee must be documented. Therefore, it is better to send the request by registered mail with a list of attachments or by courier service.

The beneficiary controls the capital

At the first stage of work, it is necessary to identify those persons who could potentially be beneficiaries. Rosfinmonitoring suggests using any legal sources of information for this (clause 2.1 of the information letter of Rosfinmonitoring dated March 18, 2009 No. 2 “On the procedure for applying the Federal Law dated August 7, 2001 No. 115-FZ”). For business companies, the main sources are the Unified State Register of Legal Entities (for LLCs) and the register of shareholders (for JSCs).

The company must identify:

individuals who directly own more than 25% of shares (shares);
all(!) legal entities that are its participants (shareholders).

The first category of persons is automatically (by force of law) included in the list of beneficiaries. A request must be sent to them to confirm this status, since they may own shares (shares) in the interests of someone else. We also recommend sending inquiries to individuals who own less than 25% of shares (shares), because they may be related, which means their shares (shares) can be summed up.

A request must be sent to the second category of persons to clarify who owns their authorized capital (Example 6). This is necessary to establish indirect ownership of a 25% block of shares (shares). Moreover, requests, in our opinion, must be sent regardless of the share of ownership of these legal entities. After all, it is possible that the ownership package will “add up” from several parts.

Example 6

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The second stage is processing the received responses. Based on its results, the company should understand whether there is a need to send further requests. Perhaps the organization will receive information that other companies own shares in the authorized capital of its participant - a legal entity. And according to the law, to identify the beneficiary, you need to reach the end of the chain - to the individual.

Of course, the legislator assumes that organizations higher in the chain inform lower ones about all the links that are above them. But this assumption is not always true. Therefore, if you receive a message in response without a direct indication of the beneficiary, it is worth sending requests to organizations further down the ownership chain. And such requests must be sent until all the “physicists” are identified (or until the answers stop coming).

Example 7

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It is worth noting that the obligation to provide information necessary to identify beneficial owners rests only with first-tier companies. That is, on legal entities - participants of this company, as well as on persons who otherwise control it (Clause 5, Article 6.1 of Law No. 115-FZ). This means that a member of a member can, in good conscience, ignore the request if he is not the person controlling the company.

The beneficiary uses other methods of control

If the beneficiary controls the company not through ownership of its shares (shares), then there are not very many mechanisms for establishing it. Just as with capital controls, inquiries must be made to the possible beneficial owners. But it is much more difficult to outline the circle of “candidates” for beneficiaries. Firstly, there are no uniform criteria for identifying such persons. Secondly, the very fact that they need to be identified indicates their desire to remain in the shadows.

Now let’s ask ourselves a question - what kind of general director (hired employee) will go against the will of the person who actually controls the company? That is, against the will of the one who pays his salary?

It turns out that in this situation the company can identify its beneficiaries only in one case - if the beneficiary himself declares himself and explains the mechanism of his control. In fact, such situations happen quite often. Typically, “coming out of the shadows” occurs after communicating with the bank, for example, when applying for a loan. Accordingly, the decision to include the beneficiary person in the register of the organization itself is made in exactly the same way.

Found. What's next?

Information must not only be identified, but also stored. The easiest way to do this is in the register of identified beneficiaries (Example 8). The form of such a register is dictated by the list of data about the beneficiary that the company must have (subclause 1, clause 1, article 7 of Law No. 115-FZ).

Example 8

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At the same time, the documents on the basis of which beneficial ownership was established also need to be compiled into an archival file. They must be stored for five years (subclause 2, clause 3, article 6.1 of Law No. 115-FZ).

Not found. Will they be punished?

The law is harsh on those who do not have information about their beneficial owners. The fines are quite significant even for large companies. Paying half a million simply because the register of beneficial owners of a company was not filled out in a timely manner is a dubious “pleasure.”

Document fragment

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Article 14.25.1. Code of Administrative Offenses of the Russian Federation

Failure by a legal entity to fulfill obligations to establish, update, store and present information about its beneficial owners or about measures taken to establish information in relation to its beneficial owners as determined by the legislation of the Russian Federation, at the request of the authorized body or tax authorities -

shall entail the imposition of an administrative fine on officials in the amount of thirty thousand to forty thousand rubles; for legal entities - from one hundred thousand to five hundred thousand rubles.

It's easy to avoid responsibility. You just need to provide a timely response to the request of Rosfinmonitoring or the Federal Tax Service of Russia. But what if the company was unable to obtain information about its own beneficiaries? How to be in this case?

The main thing is to show the regulatory authorities that the company tried to collect the necessary information. Indeed, the law establishes the obligation to collect and store such information, but does not establish liability for the refusal of other persons to provide it. Moreover, even the theoretical obligation (clause 5 of Article 6.1 of the Federal Law of Law No. 115-FZ) applies only to the organization’s own participants and persons directly controlling it, but does not apply at all to the founders of your founders.

Therefore, no matter how hard an organization tries, it is likely that it will not be able to identify its beneficiaries (or will not identify all of them). The simplest situation is when all participants of an LLC are legal entities, but the chain does not end there, since the founders of the founders are also legal entities. Even if the “first line” companies (your participants) responded to you, the “second line” may ignore the request. Especially if companies registered abroad appear in the chain. Will you face a fine? Rosfinmonitoring believes not.

Document fragment

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Information message of Rosfinmonitoring “On the procedure for disclosure by legal entities of information about their beneficial owners in accordance with Article 6.1 of the Federal Law of 07.08.2001 No. 115-FZ “On combating the legalization (laundering) of proceeds from crime and the financing of terrorism”"

If a legal entity cannot establish its beneficial owner and has taken all available measures to establish the relevant information regarding him, then such legal entity, upon receipt of a request from authorized government bodies, must provide information on the measures taken to establish information about their beneficial owners. Documents confirming the adoption of measures may be the above requests to the founders (other controlling persons) and responses to them.

Thus, if an organization was unable to collect data about its beneficiaries through no fault of its own, there is no need to fear a fine. However, it will be necessary to confirm that the company has done everything in its power. As Rosfinmonitoring indicated, in fact, the only way to do this is to attach postal receipts and lists of attachments confirming that requests were sent to possible beneficiaries.

Conclusion

The practice of holding people accountable for the lack of information about a beneficiary cannot yet be called widespread. And this is not surprising, because the by-laws defining the procedure for interaction between regulatory authorities and legal entities came into force only on August 18, 2017 (the date the Rules entered into force). Therefore, business will probably face massive requests next year. And it is necessary to prepare for this in advance, because after receiving a request, the organization simply will not have time to quickly (five working days) collect information about the beneficiaries.

Beneficiary- this is the recipient of cash payments (income) according to the drawn up agreement or debt document. Such a recipient can be not only an individual, but also a legal entity that is the owner of all or the majority of the company’s shares and receives all income from the company’s activities.

Sometimes the concept of beneficiary can be transported to beneficiary. However, its value will not change at all.

Description of the beneficiary in simple words

A beneficiary is a person who owns documents for property (company, business, real estate) and receives the main profit from this.

Beneficiary - information from Wikipedia

Other meanings of the term "beneficiary"

However, the concept of beneficiary can be considered from other non-identical points of view.

This may be the name given to persons who receive income from their property, which is in the use of third parties or in trust management. We are talking about the lease of movable and immovable property or the fact of transferring securities for use by brokers.
There is another interpretation of the concept of beneficiary. In this case, they will be presented with a claimant who has been nominated by the policyholder. In this case, the beneficiary is indicated in the insurance policy. If the beneficiary, due to certain circumstances, cannot receive the agreed debt, all rights to ownership of the funds being paid will be transferred to the person who is the heir of the beneficiary.
This term also refers to the immediate recipients of a bank certificate, funds in collection, or recipients of financial benefits from a trust. The beneficiary can also be called persons who were indicated by the issuing bank as potential owners of a documentary letter of credit.
If we talk about the business sector, here the actual owner of the company who receives profit can act as a beneficiary. This is an individual who is able to enjoy all the rights of an owner and position himself as the owner of the company. This process can be carried out directly or through participation in other organizations. Moreover, from a legal point of view, the ownership right belongs entirely to another person. Most often, the same person also acts as the manager of the company’s bank account. The beneficiary can only be disclosed to the financial institution and the company's agent of record.

The beneficiary, who is positioned as the owner of the securities, has full rights to transfer ownership rights. In addition, he has an indirect right to vote at a meeting of the joint-stock company, as well as the right to take direct part in the process of selecting new management and resolve issues related to the procedure for changing the authorized capital or changing the profile of the joint-stock company.

To hide the identity of the final beneficiary, a nominee service is often used, which is permitted in many offshore companies. The choice of the level of protection of a suitable company and accompanying document requirements can be made depending on the personal wishes of the client.

Providing information about the beneficiary is a mandatory procedure. An exception may be companies that are publicly listed. The same list includes charitable and public organizations, government-type institutions that cannot have owners or if they are known.

Only an individual can act as a beneficiary. A trust agreement can be drawn up for a legal entity, but you must first provide all information about the individual who is the actual owner of this organization.