The Ministry of Justice of the Slovak Republic (hereinafter also referred to as “MoJ SR”) has submitted to the Government of the Slovak Republic a draft law amending Act No. 530/2003 Coll. on the Commercial Register and on the amendment and supplementation of certain laws, as amended, and amending and supplementing Act No. 346/2018 Coll. on the Register of Non-Governmental Non-Profit Organizations and on the amendment and supplementation of certain laws, as amended (hereinafter referred to as the “draft law”).
The deadline for the inter-ministerial comment period was shortened pursuant to Article 13( 7 of the Legislative Rules of the Government of the Slovak Republic, as this is a bill submitted outside the government’s legislative agenda due to its urgency, within a timeframe that does not allow for the regular comment period to be observed.
The bill was ultimately debated in the third reading at the 94th session of the National Council of the Slovak Republic, Resolution No. 2394 on June 20, 2023. Outcome of this stage of the process: The bill proceeds to drafting. Pursuant to the approved bill, the law takes effect on the date of its promulgation (except for Article I, points 2 through 4), which take effect on November 1, 2023.
Under the currently applicable provisions of Act No. 530/2003 Coll. on the Commercial Register and on Amendments to Certain Acts (hereinafter also referred to as the “Commercial Register Act”), the Commercial Register is required to record, among other data, information regarding the type and number of the identity document of the ultimate beneficial owner entered in the Commercial Register.
This legal provision was introduced by Act No. 52/2018 Coll., amending Act No. 297/2008 Coll. on the Prevention of Money Laundering and the Prevention of Terrorist Financing and on Amendments to Certain Acts, as amended, and amending certain acts. This amendment was justified on the grounds that it ensures the transposition of Article 30 of the IV. AML Directive, which requires business entities and other legal entities to obtain and maintain adequate, accurate, and up-to-date information regarding their ultimate beneficial owner, and that the Member State must ensure the retention of such information in one of the Member State’s central registers.
However, we believe (as also stated in the explanatory memorandum to the draft law) that neither from European legislation governing the prevention of money laundering and the financing of terrorism (so-called AML legislation) nor from other obligations of the Slovak Republic is it possible to derive a requirement to record data on the type and number of identity documents of beneficial owners. Similarly, the explanatory memorandum states that recording the type and number of an identity document is problematic also in situations where a new identity document is issued, which forces registered persons to update the data recorded in the relevant registers, and thus constitutes an unnecessary administrative burden. This is all the more true given that the recent invalidation of certificates in ID cards used for creating electronic signatures has led to mass replacements of ID cards, which in turn causes mass amendment procedures, particularly with regard to entrepreneurs registered in the Commercial Register.
The proposer also noted that, given the fact that the ultimate beneficiaries are not solely and exclusively citizens of the Slovak Republic, it is not appropriate to completely abandon the recording of the type and number of the identity document, because foreigners often do not have a birth number or a similar unique identifier. For this reason, under the proposed legislation, the recording of the type and number of the identity document will be required only for persons who are not citizens of the Slovak Republic.
The bill therefore specifically provides that:
a) the Commercial Register Act is amended as follows: In § 2(3), first sentence, the period at the end is replaced by a semicolon, and the following words are added: “information regarding the type and number of the identity document shall not be entered in the Commercial Register if the person is a citizen of the Slovak Republic.”
b) Act No. 346/2018 Coll. on the Register of Non-Governmental Non-Profit Organizations and on Amendments to Certain Acts is amended as follows: In § 3(4), first sentence, the period at the end is replaced by a semicolon, and the following words are added: “Information regarding the type and number of the identity document shall not be entered in the register if the person is a citizen of the Slovak Republic.”
For the sake of interest, we would like to mention at this stage of the legislative process some of the comments raised during the inter-ministerial comment procedure
- The Ministry of Investment, Regional Development, and Informatization of the Slovak Republic proposed expanding the amendment so that information regarding the type and number of the identity document is not entered into the Commercial Register, not only in the case of a citizen of the Slovak Republic but also in the case of a third-country national or an EU citizen holding a residence permit issued in the territory of the Slovak Republic, justifying this by the fact that nationals of other countries may also be issued a Slovak identity document, which includes, among other things, the birth number of such a natural person
- The National Bank of Slovakia also proposed amending Section 4(2)(d) of Act No. 315/2016 Coll. on the Register of Public Sector Partners and on Amendments to Certain Acts, specifically by expanding the scope of required data to include the birth number. It proposed this because it is necessary to adjust the scope of data recorded in individual registers so it is uniform across the registers established by the aforementioned laws and is consistent with the scope of identification data specified by Act No. 297/2008 Coll. It justified this change by noting that there are currently differences in the scope of recorded data across individual laws, which causes problems in practice when verifying the identification of persons as required under Act No. 297/2008 Coll. (e.g., Section 4(2)(d) of Act No. 315/2016 Coll. on the Register of Public Sector Partners and on Amendments to Certain Acts, as amended, currently reads: “d) a list of ultimate beneficial owners, including first name, last name, permanent address, date of birth, nationality, and information on whether the ultimate beneficiary is a public official performing a function in the Slovak Republic”—the birth number is not required in this case, - Section 3(1)(d), fourth point, of Act No. 346/2018 Coll. on the Register of Non-Governmental Non-Profit Organizations and on Amendments to Certain Acts, as amended, currently reads: “4. birth number or other identifier of a natural person, if so provided by a special regulation.”) – here we would like to briefly express our disagreement with the expansion of the scope of required data to be recorded under the Act on the Register of Public Sector Partners, as it is not in line with current European legislation and the evolving case law of the ECJ, and certainly not due to existing problems in practical application when verifying the identification of persons, which is required under Act No. 297/2008 Coll. – more on the landmark ruling of the Court of Justice of the European Union in our previous article.
- Considerations were also raised as to whether citizens of other European Union member states who have a birth number or another similar unique identifier would also be exempt from providing details regarding the type and number of their identity document, for the same reasons as in the case of Slovak citizens, since otherwise this could constitute discrimination based on nationality, where the administrative burden on registered persons would be disproportionate, since citizens of other Member States would have to constantly update their data, unlike citizens of the Slovak Republic, as well as proposals for consideration, whether the established restriction in the form of recording data on the type and number of the document in the case of a person other than a citizen of the Slovak Republic is discriminatory and cannot be assessed as a quantitative (numerical) restriction or a restriction with a similar (equivalent) effect on the internal market (since Member States are obligated to apply to EU citizens or citizens of EU Member States only those measures in the internal market that are applied uniformly to their own citizens.
The law firm Hronček & Partners, s. r. o. is ready to provide you with comprehensive legal advice and services in connection with any changes in the Commercial Register concerning, among other things, the beneficial owner data in the Commercial Register and the registration of any other changes in the Commercial Register.
