Progress in the development of the register of beneficial owners
Combating of money laundering comes under the UN Sustainable Development Goal of Peace, Justice and Strong Institutions (16).
The activities of companies involve a higher risk of money laundering and terrorist financing because the persons behind companies’ operations do not always act in their own name.
To reduce the risk, companies are obliged to report the details of their beneficial owners to the Trade Register and to keep the information up to date. The PRH started registering details of beneficial owners in July 2019.
In 2022, we continued the development of a comprehensive, up-to-date and quality-confirmed register of beneficial owners. In addition to ensuring the timeliness and comprehensiveness of the register, we are also working to digitalise official processes and increase automated data processing.
Developing the register of beneficial owners is part of the European Union’s digitalisation project, which is funded from the Recovery and Resilience Facility (RRF).
Automating supervision
In 2022, we sent letters to more than 30,000 limited liability companies and co-operatives reminding them of their obligation to report details of beneficial owners.
At the same time, we also prepared the automation of the procedure so that in the future the Trade Register processing system will automatically send reminders of missing information on beneficial owners.
We introduced measures to ensure that more companies report their beneficial owners
We worked on updated electronic start-up notifications for limited liability companies in which new companies can report the details of their beneficial owners as part of the start-up process and not wait until after the registration.
The updated notifications will be introduced during 2023 and the aim is that in the future a substantially higher proportion of limited liability companies will report the details of their beneficial owners.
We developed the exchange of information on beneficial owners
In the past, EU Member States were unable to retrieve information from each other’s beneficial owner registers. To make the information accessible, the EU has established the Beneficial Ownership Registers Interconnection System (BORIS). During 2022, we built functionalities for the PRH’s information systems to allow Finland and other EU countries to retrieve information on beneficial owners from each other’s registers.
We also examined to what extent the Finnish authorities need information on beneficial owners. We started to prepare new electronic information services on this basis. The work will continue for the next few years.
At the moment, the information on beneficial owners collected by the PRH and the ownership information kept by the Finnish Tax Administration cannot be compared to ensure the correctness of the information on beneficial owners. In 2022, we examined which functionalities and legislative changes would be required to allow the exchange of the information.
We supervised the work of auditors and provided them with advice
Auditors play a key role in the identification of suspicious business activities and thus also in the combating of money laundering and terrorist financing.
The Act on Money Laundering imposes obligations on auditors, and compliance with these obligations is supervised by the PRH. In 2022, we supervised the activities of auditors by carrying out ten inspections based on the Act on Money Laundering. This was the same number as in 2021.
The task of the PRH is also to provide auditors with advice. In 2022, we held the first information briefing on the Act on Money Laundering for auditors. The briefing was open to all auditors and in the future, similar events will be arranged every six months.
In 2022, the PRH representative chaired the national group for inter-authority cooperation on money laundering and terrorist financing. The focus in the group’s work is on the exchange of information between supervisors.