Further to our previous column, to prevent and eradicate the crime of money laundering and terrorism financing, the government has issued Presidential Regulation Number 13 of 2018 on the Implementation of Know Your Beneficial Owner Principle By Corporations to Prevent and Eradicate Money Laundering and Financing of Terrorism (Regulation 13/2018). In Regulation 13/2018, every corporation is required to define the beneficial owner in a corporation.
Types of Corporations
The Know Your Beneficial Owner Principle requires corporations to determine at least one beneficial owner. The Regulation 13/2018 defines the following forms of corporation:
- limited liability company;
- limited partnership;
- commercial partnership; and
- other forms of corporation.
The Regulation 13/2018 sets for each type corporation different criteria for the Beneficial Owner. In this column we will limit our scope to the criteria for the Beneficial Owner of a limited liability company (PT). Article 4 paragraph 1 of Regulation 13/2018, lists the criteria of a Beneficial Owner of a limited liability company, who is an individual who:
- owns more than 25% of the shares in a limited liability company;
- possesses more than 25% of the voting rights in the limited liability company;
- receives more than 25% of the annual profit generated by limited liability company;
- has the authority to appoint, replace or dismiss members of board of directors and members of board of commissioners;
- has the authority or power to influence or control the limited liability company without obtaining authorization from any party;
- receives benefit from the limited liability company; and/or
- is the actual owner of the fund used for the share ownership of the limited liability company.
The determination of category of Beneficial Owner of Corporation is as follows:
- Identified-Beneficial Owner, where a corporation has already performed the identification and verification of a Beneficial Owner
- Unidentified Beneficial Owner, where a corporation has determined the Beneficial Owner, however has not conducted the identification and verification yet
- Unverified Beneficial Owner, where a corporation has determined the Beneficial Owner of Corporation and has performed the identification, however has not yet conducted the verification.
The data about the Beneficial Owner needs to be updated on annual basis.
All corporation must follow the Know Your Beneficial Owner Principle within 1 year as of March 1, 2018. Noncompliance of the Regulation 13/2018 may lead to sanctions.
This column is provided by PNB Law Firm Jakarta