The identification of the final beneficiary (hereinafter referred to as “KUV”) of a public sector partner (hereinafter referred to as ‘PVS’) is carried out upon its registration in the register of public sector partners (hereinafter referred to as “register”) by an authorized person who is obliged to act impartially and with professional care and to fulfill other obligations arising from Act No. 315/2016 Coll. on the register of public sector partners and on amendments to certain acts (hereinafter also referred to as the “RPVS Act”) and other legal regulations.
The authorized person performs activities related to the registration procedure for the PVS and, together with the PVS, is responsible for the accuracy, timeliness, and completeness of the data entered in the register, the identification of KUVs, the verification of KUV identification, and their regular updating.
In addition to the initial identification of KUV and the registration of PVS in the register, the authorized person also verifies the identification of KUV (so-called verification) during the period of PVS registration in the register, especially in the case of so-called verification events. Verification events are exhaustively defined in Section 11(2)(a) to (e) of the RPVS Act, which states:
"(2) The authorized person is obliged to identify the ultimate beneficiary upon initial registration in the register and subsequently verify the identification of the ultimate beneficiary
a) in connection with the submission of a proposal to register a change of the ultimate beneficiary,
b) upon registration as an authorized person in the register,
c) on December 31 of the calendar year, unless otherwise provided in paragraph 8,
d) in connection with the conclusion of a contract whose performance exceeds the value of the performance under § 2(2) and (3), or its amendment, no earlier than ten days prior to the conclusion of the contract or its amendment,
e) in connection with the performance of a contract whose value exceeds a total of EUR 1,000,000 within 30 days, no earlier than ten days prior to the performance of the contract.
If the identification or verification of the KUV has been carried out by an authorized person in the previous six months prior to the conclusion of the contract, amendment of the contract or performance of the contract, the exemption from the mandatory verification of the KUV shall apply to the verification events referred to in points (d) and (e). This exemption, regulated in Section 11(3) of the RPVS Act, was established to eliminate multiple verification of KUV identification. For a clearer understanding, we provide the following example: PVS was registered as an authorized person on February 1, 2021, and KUV identification was performed upon its registration. In May 2021, PVS plans to conclude a contract whose performance exceeds the financial limits set by law. The conclusion of such a contract will trigger a verification event pursuant to Section 11(2)(d) of the RPVS Act, in which case the KUV identification must be verified. Since the KUV was last identified on February 1, 2021, i.e., no more than six months before the conclusion of the contract, the exception under Section 11(3) of the RPVS Act applies and verification of the KUV identification under Section 11(2)(d) of the RPVS Act is not necessary in this case.
In addition to verification events where KUV verification is mandatory, Section 11(4) of the RPVS Act provides for the possibility of voluntary verification of KUV identification (the implementation of which may be agreed in writing between the authorized person and the PVS), the need for which arose from the application practice of authorized persons and PVS. Based on this provision, KUV identification verification may be performed at any time, even without any of the above verification events occurring.
Verification of KUV identification ensures that the KUV data entered in the register is up to date. By its actions, the authorized person carries out separate control and verification activities vis-à-vis the PVS, and is obliged to act independently and impartially and in this way also verify the accuracy and completeness of the KUV data entered and also the PVS. If the obligation to verify the identification of KUV is not fulfilled, the law allows the PVS, in accordance with Section 15(2) of the RPVS Act, to impose sanctions, including refusal to perform the contract by the public sector (for the duration of the non-fulfilment of the obligation). At the same time, if false or incomplete data on KUV or public officials are entered in the register, or if the obligation to submit a proposal to amend the registered data is not fulfilled, this may be sanctioned by a fine imposed by the RPVS Act. You can find out more about sanctions under the RPVS Act in our article “Sanctions in the Register of Public Sector Partners”, which is available at: https://www.legalfirm.sk/sk/partner-verejneho-sektora/clanok/sankcie-pri-rpvs.
Submitting a proposal to register a change to the KUV
A verification event within the meaning of Section 11(2)(a) of the RPVS Act is a change to the KUV – either a change to the registered KUV data (most often a change of permanent address or a change of surname of the KUV) or a change in the KUV itself (another person meets the conditions for identification as a KUV or a person no longer meets the conditions for identification as a KUV).
Change of authorized person
Each PVS must have a kind of intermediary or representative in the register – an authorized person who performs all activities and tasks related to the identification and verification of KUV identification arising from the RPVS Act. A PVS may only have one authorized person registered in the register at any given time. However, one authorized person may perform the activities of an authorized person for several PVSs. If their cooperation ends, there are two options: the first is to delete the PVS from the register and the second is to delete the authorized person from the register, in which case the PVS itself remains registered (this is a deletion or change of the authorized person in the register). An authorized person may terminate cooperation with a PVS, for example, because the PVS does not provide the necessary cooperation required by the RPVS Act for the proper performance of the authorized person's duties. If an authorized person is deleted, the PVS is obliged to ensure that a new authorized person is registered within 30 days of the deletion.
Regular verification of KUV as of December 31 – “WINTER VERIFICATION”
The most common verification event is the verification of KUV identification as of December 31 of each (relevant) calendar year. The purpose of this verification is to ensure that data is updated at least once a year. PVSs often believe that if there have been no changes in their entity since the last KUV identification verification, they do not have to cooperate with the authorized person during the regular KUV verification as of December 31 of the calendar year. Since the verification of KUV as of December 31 is a mandatory verification event pursuant to Section 11(2)(c) of the RPVS Act, the authorized person must update the data and the PVS is obliged to cooperate in this process. The purpose of Section 11(2)(c) of the RPVS Act is to declare the status as at December 31 of the relevant calendar year. However, the notification of identification verification may also be sent after December 31 of the calendar year. The last day for sending the notification of identification verification was set in Section 11(8) of the RPVS Act as February 28 of the following calendar year. If the authorized person discovers a change in the registered KUV data, they are obliged to proceed in accordance with Section 9 of the RPVS Act.
Verification upon conclusion of a contract and upon amendment thereof
Verification of identification pursuant to Section 11(2)(d) of the RPVS Act is intended to ensure the accuracy and completeness of KUV data prior to the conclusion of a contract or amendment thereof. The obligation to verify the identification of the KUV applies to the conclusion of a contract or amendment to a contract with a value exceeding the financial limits pursuant to Section 2(2) and (3) of the RPVS Act, no earlier than ten days prior to the conclusion of the contract or its amendment. In this case, the PVS must inform the authorized person in advance of the occurrence of this verification event.
Verification during performance of the contract
Verification of the identification of KUV prior to performance of a contract whose value exceeds a total of one million euros in 30 days is required before the actual performance of the contract. As in the previous case, the RPVS Act stipulates that verification of KUV identification must be carried out no earlier than ten days before the performance of the contract is due to take place. In this case, the PVS must also inform the authorized person in advance, as the authorized person is not able to determine the planned performance of the contract on their own.
The regular KUV verification, known as winter verification, is currently approaching on December 31, 2021. We would like to remind you that winter verification is one of the above-mentioned verification events when verification of the KUV PVS identification is mandatory. Therefore, please do not forget that it is necessary to provide the authorized person with the required cooperation. If you have already received an email requesting supporting documents and documents for the so-called winter verification, please do not ignore it and fulfill your legal obligation related to registration in the register so that all obligations arising from the RPVS Act are fulfilled within the statutory deadlines.
