Costa Rica published the new regulations to comply with the Transparency and Final Beneficiaries Registration Law. (Registro de Transparencia y Beneficiarios Finales – RTBF). Enforced by Executive Decree No. 44390-H, these regulations serve as a basis to enforce compliance. This blog post delves into the specifics of these regulations, clarifying the legal requirements for compliance.
The RTBF, established under Law No. 9416 (Law to Improve the Fight Against Tax Fraud), mandates that certain entities disclose their final beneficiaries to a centralized registry managed by the Costa Rican Central Bank. This measure aims to peel away the layers of corporate structures to reveal the actual individuals who ultimately own, control, or benefit from these entities. The regulations set forth by Executive Decree No. 44390-H outline the operational mechanisms, access controls, and filing procedures of the RTBF.
The decree defines the various roles and terms critical for its implementation. These include the definitions of a final beneficiary, direct and indirect control, due diligence processes, and legal structures subject to these requirements. Obligated subjects encompass legal entities registered in the National Registry, trusts, administrators of third-party resources, and non-profit organizations, among others, with specific exemptions detailed for entities like those listed on organized stock exchanges.
Identification of Final Beneficiaries: Entities are required to disclose the individuals who ultimately own or exert significant control over the entity, directly or indirectly. This includes those with substantial voting rights or those who can appoint or dismiss the majority of the administrative, management, or supervisory bodies.
Due Diligence and Custody: The responsible parties must undertake due diligence to verify and validate the accuracy of the information submitted. They are also required to maintain documentation supporting their due diligence for five years.
Filing Deadlines and Procedures: The decree mandates compliance within specified deadlines.
The decree lays out mechanisms for ensuring compliance, including a detailed process for due diligence and the requirement for entities to retain supporting documents. It also specifies the roles and responsibilities of the Central Bank of Costa Rica in administering the RTBF, including maintaining the integrity and confidentiality of the information.
Entities that fail to comply with the RTBF requirements are subject to penalties, including monetary fines. The regulations detail a notification process for entities in breach, offering them an opportunity to rectify their status before sanctions are applied.
In the section below we are setting forth some of the main points of the regulations
Chapter I: General Provisions
Article 1: Scope. This regulation establishes the operational mechanisms, access, and control of the Transparency and Final Beneficiaries Registry, referred to as RTBF, in accordance with Law No. 9416, “Law to Improve the Fight Against Tax Fraud,” detailing the structure, technology, and security of the information system.
Article 2: Definitions. Provides definitions for terms such as administrator, third-party resource manager, database, final beneficiary or effective beneficiary, direct control, indirect control, due diligence, legal structure, digital signature, substantial influence, non-compliance list, non-profit organization, substantive participation, legal person, audit trail, and software program.
Chapter II: Obligated Subjects, Information Supply, and Final Beneficiaries
Article 3: Subjects Obligated to Provide Information. Lists the entities required to submit information to the RTBF, including legal entities registered in the National Registry, private trusts, third-party resource administrators, non-profit organizations, and certain entities within the public sector with private participants.
Article 4: Exclusions from Information Requirement. Specifies entities excluded from providing information, such as publicly traded companies, public trusts, and financial entities supervised by relevant authorities.
Article 5: Responsibilities for Providing Information. Designates who is responsible for providing information to the RTBF, typically the legal representative or equivalent of the obligated entity.
Chapter III: Information Requirements
Details the specific information that obligated entities must register in the RTBF, including identifying their final beneficiaries and the due diligence process for verifying this information.
Chapter IV: Obligations and Powers of the Central Bank of Costa Rica
Outlines the responsibilities of the Central Bank of Costa Rica as the administrator of the RTBF, including ensuring the security, integrity, and confidentiality of the information.
Chapter V: Guarantees for Final Beneficiaries
Provides mechanisms for individuals to inquire whether they are included in the RTBF and to request corrections if necessary.
Chapter VI: Notifications, Communications, Sanctions, and Verification Duties
Establishes the procedures for notifications and communications regarding RTBF compliance, the sanctioning regime for non-compliance, and verification duties of the National Registry and notaries.
