The Ministry of Justice of the Slovak Republic (hereinafter referred to as "MS SR") submitted to the Government of the Slovak Republic a draft law amending and supplementing Act No. 530/2003 Coll. on the Commercial Register and on amendments to certain acts as amended, and amending Act No. 346/2018 Coll. on the Register of Non-Governmental Non-Profit Organizations and on amendments to certain acts as amended (hereinafter referred to as the "draft law").
The deadline for inter-ministerial consultation was shortened in accordance with 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, which does not allow for the regular deadline for consultation to be met.
The draft law was finally debated in the third reading at the 94th session of the National Council of the Slovak Republic, Resolution No. 2394 of 20 June 2023. Result of the stage of the process: The draft law is being sent to the editorial office. Under the approved draft law, the law will enter into force on the date of its promulgation (with the exception of Article I, points 2 to 4), which will take effect on November 1, 2023.
According to the current legal regulation of Act No. 530/2003 Coll. on the Commercial Register and on amendments and supplements to certain acts (hereinafter also referred to as the "Commercial Register Act"), it is required to enter, among other data, data on the type and number of the identity document of the ultimate beneficiary entered in the Commercial Register.
This legal regulation was introduced by Act No. 52/2018 Coll., amending Act No. 297/2008 Coll. on protection against the legalization of proceeds from criminal activity and on protection against terrorist financing and amending certain acts, as amended, and amending certain acts. This change was justified by the fact that it ensures the transposition of Article 30 IV. AML Directive, which requires business entities and other legal entities to obtain and hold adequate, accurate and up-to-date information on their beneficial owners, and the Member State to ensure that this information is stored in one of the central registers of the Member State.
However, we believe (as stated in the explanatory memorandum to the draft law) that neither European legislation on the prevention of money laundering and terrorist financing (AML legislation) nor other obligations of the Slovak Republic provide for a requirement to record the type and number of identity documents of beneficial owners. The explanatory memorandum also states that recording the type and number of identity documents is problematic in situations where a new identity document is issued, as this requires the persons registered to update the data recorded in the relevant registers, thus creating an unnecessary administrative burden. This is all the more true given that the recent invalidation of certificates in identity cards used for electronic signatures has led to mass replacements of identity cards, which in turn has resulted in mass change procedures, particularly in relation to entrepreneurs registered in the commercial register.
The submitter also stated that, taking into account the fact that the end users of the benefits 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 identity documents, as foreigners often do not have a birth number or similar unique identifier. For this reason, according to the proposed legislation, the type and number of identity documents will only be required for persons who are not citizens of the Slovak Republic.
The draft law therefore specifies that:
a) the Commercial Register Act is amended as follows: In Section 2(3), first sentence, the full stop at the end is replaced by a semicolon and the following words are added: "information on the type and number of identity documents shall not be entered in the Commercial Register in the case of citizens 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 full stop at the end is replaced by a semicolon and the following words are added: "Information on the type and number of identity documents shall not be entered in the register in the case of citizens of the Slovak Republic.".
For the sake of interest, at this stage of the legislative process, we would like to mention some of the comments made during the inter-ministerial consultation process
- The Ministry of Investment, Regional Development and Informatization of the Slovak Republic proposed to extend the amendment so that the type and number of the identity document are not entered in the commercial register not only in the case of citizens of the Slovak Republic, but also in the case of third-country nationals or EU nationals with a residence permit issued in the Slovak Republic, justifying this by the fact that nationals of other countries may also be issued with a Slovak identity document which, among other things, includes the birth number of such natural persons
- The National Bank of Slovakia has 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, so that the scope of the required data is extended to include the birth number. It proposed this because it is necessary to adjust the scope of data recorded in individual registers so that it is uniform for the registers established by the above-mentioned laws and in accordance with the scope of identification data specified in Act No. 297/2008 Coll. It justified this change by stating that there are currently differences in the scope of data recorded in individual laws, which causes problems in practice when verifying the identification of persons 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 final beneficiaries, including their first name, surname, permanent address, date of birth, nationality and information on whether the final 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) The 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 extension of the scope of data required 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 for reasons of existing problems in the practical application of the verification of identity required under Act No. 297/2008 Coll. – more on the landmark judgment of the Court of Justice of the European Union in our previous article.
- Consideration was also given to whether citizens of other EU Member States who have a birth number or other similar unique identifier should also be required to register the type and number of their identity document for the same reasons as Slovak citizens, since otherwise this could constitute discrimination on the basis of nationality, with a disproportionate administrative burden on the persons registered, as citizens from other Member States would have to constantly update their data, unlike citizens of the Slovak Republic, and proposals for consideration whether the restriction in the form of recording the type and number of the document in the case of persons other than Slovak citizens is discriminatory and cannot be assessed as a quantitative (numerical) restriction or a restriction with a similar (equal) effect on the internal market (since Member States are obliged to apply EU citizens or citizens of EU Member States only measures in the internal market that are applied in the same way 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 relating, among other things, to the details of the ultimate beneficial owner in the commercial register and also the registration of any other changes in the commercial register.
