A specific regime for the disclosure of beneficial owners (independent from the regime under the new Fourth Money Laundering Directive) was introduced in Slovakia at the beginning of the year by the so-called Anti-Letterbox Act, whose main purpose is to combat "shell" or "letterbox" companies that receive public funds and do business with public authorities. In practice, however, it affects almost all private entities doing business with the Slovak state and authorities.
Registry and affected entities
Under the Anti-Letterbox Act, certain entities are required to register in the registry of partners of the public sector (the "Registry"), mainly those providing services or goods through public procurement or concluding other agreements with state authorities. Nevertheless, the obligation also applies to health care providers and entities supplying them, entities applying for investment aid from the Slovak state (or EU funds), and holders of licences in certain regulated industries, such as energy or mining.
The ultimate beneficial owner is a natural person actually controlling the respective company, in particular a natural person who directly or indirectly holds at least 25% of shares or voting rights in the legal entity or has other controlling rights over it. There are specific rules for publicly traded companies.As the Registry is accessible online to everyone free of charge, in practice everyone is able to see identification data on the beneficial owners, who are subject to public scrutiny (especially in cases when a company takes part in a business case / public procurement that is being covered by the media).Legal entities cannot file the application for registration, only an authorised person, who under the Anti-Letterbox Act must be one of the following: (i) attorney at law; (ii) notary; (iii) bank; (iv) auditor; or (v) tax advisor, in each case with registered seat in Slovakia. Before submitting the application, the authorised person must duly verify the information on the ultimate beneficial owners and must conduct an independent review of the company's ownership structure.
SanctionsThe Anti-Letterbox Act introduces strict sanctions for noncompliance with the registration obligation. For instance, if inaccurate information is provided to the Registry, the following sanctions may apply:
- a fine on the registered legal entity corresponding to the amount of economic benefits received from the public sec- tor or up to EUR 1 million if the amount cannot be determined;
- a fine of EUR 10,000 – 100,000 for each of the managing directors of the registered entity, who are strictly liable regardless of culpability and without possibility of release; or
- loss of licence in specific cases (eg energy licence).
Applicability in practiceThe Anti-Letterbox Act is strict, with broad application to many legal entities in Slovakia and an almost draconian system of sanctions. It also causes problems for foreign private owners of Slovak entities who want to retain their privacy. At this point, whether it will achieve its main aim is doubtful.
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