Just over 20% of companies have so far submitted information on their beneficial owners to a new central register ahead of the deadline of Friday November 22.
The Beneficial Ownership Register is being introduced to tackle white collar crime and specifically money laundering, but it has experienced some technical problems since it was set up.
The Companies Registration Office said today that due to the high volume of traffic the Register of Beneficial Ownership Portal "is currently running slower than normal".
Due to the high volume of traffic the Register of Beneficial Ownership (RBO) Portal is currently running slower than normal. We apologise for any inconvenience caused.@RBO_ie pic.twitter.com/S2haLdqnCr— CRO Ireland (@cro_ie) November 15, 2019
The register first opened for filing on July 29, but take-up so far has been low, according to law firm Mason Hayes and Curran.
The new regulations have been in force, at least in part, since March.
Part of EU-wide measures, they require compliance by most Irish businesses who must collate and submit information on their beneficial owners or potentially face significant fines, including a fine of €500,000 in the worst-case scenario.
Under the regulations, there is also a provision for custodial sentencing of up to 12 months for knowingly or recklessly providing false information to the Registrar.
Nick Metcalfe, Corporate Governance and Compliance partner at Mason Hayes and Curran, said a beneficial owner, for the purposes of this legislation, is a natural person who directly or indirectly owns or controls over 25% of a relevant entity, or who controls that entity by other means.
"If an entity cannot identify any persons who own a sufficient percentage or who exercise a sufficient level of control, then it must collate and submit information of its senior managing officials instead," he added.
Businesses are required to submit their beneficial owners' details - including each beneficial owner's name, residential address, nationality, date of birth, PPS number and the nature and extent of their ownership or control - to the central register.
Mason Hayes and Curran said that people who do not have PPS numbers are required to verify their identity by completing a form and being sworn to it by a notary.
The law firm also said that under the new Register, the Gardaí, the CAB, the Financial Intelligence Unit and other authorities such as the Law Society or the Bar Council will be entitled to all the information - except PPS numbers - on request.
This is subject to the safeguard that the request must come from an individual who is of or above a specified position or rank and who is acting on the authority of a specified higher rank or position, it added.
Organisations required to conduct customer due diligence - such as banks or law firms - will have a right of access to limited information, while members of the public will also be entitled to inspect that limited information on the register.
The law firm stressed that the public will not have access to a beneficial owner's residential address.
Despite the technical problems, the RBO received 8,179 submissions yesterday.— Central Register of Beneficial Ownership (@RBO_ie) November 15, 2019
We currently have 1,500 at the submission stage & will be processed today.
These may be held up because of:
a) mistype in the name
b) middle name is also included
c) shortened versions of a name
Meanwhile, the Chartered Governance Institute said that due to a litany of problems since the new requirements were announced, it is highly unlikely that there will be anything close to full compliance by the approaching deadline.
The Chartered Governance Institute represents governance professionals such as company secretaries who are helping companies to navigate the process.
It said that IT glitches and delays have meant that a six-month period to have these owners registered has been seriously affected.
An issue originally highlighted by the institute earlier this year regarding foreign domiciled company owners who did not have the required PPS number was one reason for the delay.
This issue was finally sorted by the middle of October but caused a four-month long backlog for that category of owner, the institute said.
"There are still ongoing problems with one in four registrations being rejected due to inconsistencies in the information where, as an example, a PJ Murphy may be the owner of a company, however his official name is Patrick Murphy and unless he uses Patrick the application is liable to be rejected," explains John Burns, Regional Development Manager for The Chartered Governance Institute.
"A rejection is then sent to the owner and the advisor will be informed that the submission was rejected, however neither will know the exact reason for the rejection," Mr Burns said.
"This can lead to frustrations on the side of the owners and advisors and multiple attempts at filing," he added.
Recent research from the Institute of Directors also shows that 65% of the survey respondents believe awareness in the business community of the deadline and requirements of those EU Regulations to be either insufficient (50%) or non-existent (15%).
Only 16% of companies surveyed felt it was sufficient.