JADIS sub-system of beneficial owners (JANGIS)
WHY DATA ON BENEFICIAL OWNERS SHOULD BE PROVIDED?
The Law on the Prevention of Money Laundering and Terrorist Financing of the Republic of Lithuania
, (hereinafter referred to as the Law), which implements the provisions of the European Parliament and Council Directive on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing*, enforces the obligation of legal entities to provide data on the beneficial owners.
The law establishes that data on beneficial owners should be registered in the newly created sub-system (JANGIS) of the Information System of Legal Entities Participants (JADIS). The Centre of Registers is the data processor of the sub-system JANGIS.
* Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015.
SUB-SYSTEM OF BENEFICIAL OWNERS – WHAT IS THIS?
JANGIS is a newly created sub-system of beneficial owners of the Information System of Legal Entities Participants (JADIS). Information about beneficial owners of legal entities (which are obligated by the Law to provide data) is stored in this sub-system.
The Law provides for an obligation of all legal entities incorporated in the Republic of Lithuania (except for legal entities whose sole member is the state or a municipality), including collective investment undertakings, to obtain, update and store accurate information on their beneficial owners – their name, surname, date of birth, personal number, the state, which issued the identity document, place of residence, ownership rights held by them and their scope (the number of shares expressed as a percentage and the number of voting rights expressed as a percentage) or other rights of control (the chair of the board, board member, director, senior manager, other position and the number of transferred voting rights expressed as a percentage).
WHY INFORMATION ABOUT BENEFICIAL OWNERS IS NECESSARY?
Data on beneficial owners shall be provided to state institutions or agencies and municipal institutions or agencies, credit and financial institutions, representatives of mass media, natural persons and legal entities in cases provided for by laws, as well as to the general public.
The availability of such data aims at greater transparency and public confidence. It will also help to combat the misuse of legal persons for money laundering or terrorist financing, ensure the transparency of the structures of beneficial owners and legal entities, and affect the circumstances for the emergence of a shadow economy in the country.
WHAT HAPPENS IF THE DATA IS NOT PROVIDED?
The data collected will be extremely important for legal entities in conducting monetary affairs, transactions, opening accounts or receiving other services in financial institutions. For example, if the information available to financial institutions and other obliged entities** about beneficial owners of their customer (legal entity) does not match the information provided by JANGIS, or JANGIS does not contain the information about beneficial owners at all, business relationships or monetary affairs and transactions with such customer will not be initiated and executed.
** When providing the services, other entities such as auditors, bailiffs, notaries, etc. are obligated to use data on beneficial owners.
WHO IS A BENEFICIAL OWNER?
- Direct owner is a natural person who directly controls legal entity by holding more than 25% of shares, interests, contributions or/and votes in that legal entity;
- Indirect owner is a natural person who controls the participant(s) of legal entity, which is/are legal entity(entities) by holding more than 25% of shares, interests, contributions and/or votes in that legal entity;
- Natural person who otherwise exercises control over legal entity, e.g., has the right to appoint or remove the manager of legal entity, to make strategic decisions;
- If there are no such persons, a beneficial owner shall be deemed to be a natural person who controls legal entity by exercising other rights, e.g., is a manager of that legal entity, chair, member of the board or any executive collegiate body, or a natural person holding the position of senior manager who would hold a sufficiently high position to take decisions on behalf of that legal entity.
A person who directly controls legal entity should be indicated only once, i.e. the same natural person could be indicated only as the owner or a beneficial owner who controls legal entity by exercising other rights. E.g., if a manager of the private limited liability company (UAB) and the sole shareholder is the same person, it is enough to submit data only on the shareholder.
WHO CAN PROVIDE DATA ON BENEFICIAL OWNERS AND WHEN?
Currently, legal entities of all legal forms whose beneficial owners are natural persons who directly and indirectly control them must submit data on the beneficial owners to the Centre of Registers***. Investment companies and investment funds will be able to provide data from July this year.
***except for legal entities whose lists of beneficial owners must contain data about the agreements on the transfer of voting rights and trusts.
HOW TO PROVIDE DATA ON BENEFICIAL OWNERS?
Data on beneficial owners of legal entities is provided to JANGIS electronically through the Self Service of the Centre of Registers.
Data on beneficial owners shall be provided to JANGIS by:
- Management body of legal entity;
- Other person provided for in laws and incorporation instruments;
- Natural person authorised on behalf of legal entity to provide documents.
The management body of legal entity or other person provided for in laws and incorporation instruments is responsible for correctness and accuracy of the provided data.
The formed lists of beneficial owners shall be signed by electronic signature verified by a qualified certificate. Currently, the following electronic signatures can be used:
- Qualified certificate issued by the Centre of Registers (more information is provided at www.elektroninis.lt);
- Qualified certificates issued by mobile operators (mobile e-signature);
- Personal identity card issued by the Identity Documents Personalisation Centre under the Ministry of the Interior, which contains a qualified signature certificate and an electronic identification certificate.