On November 27, 2023, the Government submitted for review and approval by the Assembly of Kosovo the Draft Law no. 08/L-265 “On the Registry of Beneficial Owners” (the Draft Law).
The Draft Law aims to align partially with the Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No. 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC.
The proposed Draft Law aims to provide for the Registry of the Beneficial Owners that will be administered by the Kosovo Business Registration Agency (KBRA) and outlines the process of registering beneficial owner information as well as specifies penalties for non-compliance.
Reporting Entities
According to the Draft Law, the following entities have the obligation to report/register the beneficial owner:
- Limited liability companies;
- Joint stock companies;
- Limited partnerships;
- General partnerships;
- Representative offices and branches of foreign companies;
- Public enterprises;
- Socially owned enterprises;
- Agricultural cooperatives;
- Any other legal entity, which by law is obliged to register with the KBRA;
- Non-profit organizations;
- Organizations in bankruptcy, liquidation, or insolvency proceedings;
- Trusts and legal arrangements.
The Draft Law excludes the natural persons registered as individual entrepreneurs with the KBRA, religious communities and political parties from the obligation to report.
The Registry of Beneficial Owners
The Ministry of Industry, Entrepreneurship, and Trade, in cooperation with KBRA, is mandated to establish the Registry of Beneficial Owners within one year from the entrance into force of the law. KBRA will be responsible for the operation and maintenance of the Registry, which is required to encompass comprehensive details for the identification of beneficial owners, along with general information on the reporting entities.
The Registry must ensure the protection of personal data, through a proportional processing of the data. The general information recorded with the Commercial Registry and the Registry of Nonprofit Organizations will be transferred automatically to the Registry.
Information pertaining to the beneficial owner in the Registry will be retained for a period of 10 years subsequent to the deregistration of the reporting entity from either the Commercial Registry or the Non-profit Organization Registry.
Existing reporting entities must identify their beneficial owners, create and maintain relevant documents for registering the required data within 60 (sixty) days from the date of the set-up of the Registry.
Newly registered entities should report the data related to the beneficial owners within 30 (thirty) days from the date of their registration.
Administrative Complaint Procedure
Any concerned party has the right to submit an administrative complaint regarding actions, decisions, or conduct of KBRA employees related to registrations, as outlined in the Draft Law. The complaint must be addressed to the KBRA General Director within thirty (30) calendar days from the decision’s publication in the Registry.
The decision of the KBRA General Director can be challenged, within thirty (30) calendar days, before the Business Registration Complaints Review Commission (to be established by a decision of the Minister of Industry, Entrepreneurship, and Trade).
The decision of the Business Registration Complaint Review Commission may be appealed directly to the competent court in accordance with the applicable law on administrative disputes.
Sanctions
Failure to identify the beneficial owner, to record data, or amendments of data with regard to the beneficial owner by the legal entity may be subject of a fine in the amount ranging from EUR 500 (five hundred) up to EUR 5,000 (five thousand).
A beneficial owner shall be fined in the amount ranging from EUR 30 (thirty) to EUR 2,000 (two thousand) in cases of failure to provide the required mandatory data within the deadlines provided by the Draft Law.
The process and imposition of penalties for minor offenses, as outlined in this Draft Law, will align with the relevant legislation governing minor offenses.
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