Beneficial ownership disclosure

The Danish government issued provisions on beneficial ownership in the Danish Companies Act in 2016¹ which requires, with effect from 1 July 2018, that all companies registered in Denmark inform who their beneficial owners are via the central business register. In 2019, an additional provision regarding beneficial ownership was included in the Danish Companies Act.² This provision strengthened the enforcement of the requirement that the information provided in the Danish business registry must be accurate and current.

Information and guidelines about beneficial ownership is promoted on the Danish Business Authority’s webpage³ and the Division of Foundations under the Department of Civil Affairs of the Ministry of Justice’s webpage. A review of the Danish practices is included in a report from the FATF from October 2019, Best Practices on Beneficial Ownership for Legal Persons.⁴ The report highlights the many system based, manual controls and enforcement activities in the central business register in place to ensure compliance with the provisions on beneficial ownership. According to the report, approximately 7,500 Danish companies had been compulsorily dissolved in the period from implementation of the rules until November 2019 due to failures to report beneficial owners. This proved to be an effective measure as approximately 99.8 per cent of all companies had registered their beneficial owners by January 2019.

The Danish government has ensured integration with the Business Registers Interconnection System (BRIS), an information system that connects the central, commercial and companies registers (business registers) of all member states and Norway through the European Central Platform.⁵

Furthermore, Denmark is a national member of the Open Government Partnership and therefore issues bi-annual actions plans, the latest being Denmark’s National Action Plan 2019-21.⁶ According to the action plan, in beneficial ownership was included as one of the issues that was initially, in the drafting of the action plan, considered relevant to pursue further; however, it was not selected as a priority in the final 2019-21 action plan.

Challenges to effective commitment implementation
It is a complex exercise to set and communicate standards on how to define beneficial owners in a wide range of different ownership structures.

Recommendations
It is recommended that the Danish government review the publicly available information on beneficial ownership disclosure on a recurring basis to ensure that the information is up to date. It is also recommended that the Danish government review the implementation standards, which includes an examination of how other European countries have implemented the rules.