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REGISTRY OF TRANSPARENCY AND FINAL BENEFICIARIES

    Why to report?

    The Financial Action Task Force “FATF”, (A.K.A. in Spanish as “GAFI”), is an intergovernmental body created on 1989. Its objectives are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats. A part of these tasks, FATF is requiring all countries to have a Registry of Stockholders and Beneficiaries of private entities and Trusts (including non profits organizations and foreigner trusts or entities having activities in Costa Rica). 
     


    Who to report?

    By means of Law No. 9416 published on Dec. 20, 2016, the Congress approved the creation of such Registry and commissioned the COSTA RICAN CENTRAL BANK to implement it in their databases in coordination with other government entities. 
     


    Due day?

    The law granted enough period of time for such implementation and now it is expected that such registry will start to work approximately on September 2019. 
     


    Confidentiality rules?

    The information in such database will be highly confidential; only certain government entities and under certain conditions will have access to it. However, any person will be allowed to enter into the system to verify if he/she has been reported as a Beneficiary or Shareholder in any company, trust or nonprofit organization (the access will be for these purposes only). 
     


    How to comply?

    This Registry is expected to be totally online, but to have access to it, you must have what is known in Costa Rica as “firma digital” (“digital signature”). This is similar to a credit card with a chip. It will not be possible to access the system without such card. If the President, manager or legal representative of the company or trust has this card, he/she must submit the info online to the Registry; otherwise, the President, manager or legal representative must grant a Power of Attorney (“POA”) to somebody else having such card. Then this other person will be able to submit the report under oath. This POA must be granted in a Notary Public writ (known in Costa Rica as “escritura pública”). This is a document to be signed in the Official Notary Book of the Notary (known as “protocolo”) and the Notary must enter to the Registry with his digital signature to register this POA. Once the POA has been registered, the third person may submit the report with his/her digital signature. This Registry is not working yet, but you can apply for the digital signature right now if you meet the conditions for it. Since it is expected that in a few months or weeks there will be a lot of people applying for it, it is highly recommendable that you apply as soon as possible. Unfortunately only Costa Rican citizen or foreigners with official residency in Costa Rica can apply for it. Therefore, if the President, manager or legal representative of the company is a foreigner with no official residency in Costa Rica, then it will be required a POA granted to somebody having this digital signature. We are not sure yet if the Costa Rican Consulates will be providing this service; therefore, if you are in Costa Rica try to grant this POA before you leave. It will make you this a lot easier. 
     


    Fines and penalties?

    It is really important to submit the report on time to avoid sanctions and penalties. Not complying with this, will means that National Registry will not register any document in which the company acquires any rights or properties, In addition to it, National Registry will not issue any certificate for such entity showing who are the company officers (“also known as “personería”) and the company may be obligated to pay a fine equal to 2% of the yearly gross income of the entity, with a minimum of 3 base Salary (“salario base”) and a maximum of 100 base Salary. (As of Febr. 2019, a Salary Base is approximately US$743.00). 
     


    Change of ownership, must be reported.

    The info to the new Registry will be submitted under oath. This info must be submitted once every year and/or when there is a significant change in the control of the reported entity. It will be understood that such change in control occurs when a shareholder become the owner of 15% or more of the total shares; or when somebody having such control lose it. However, there is still a new regulation pending to be enacted which may add other similar situations. With the report, the legal representative must submit also copies of the documents required to proof ownership and keep the originals in case they are also required. If these documents are issued not in Costa Rica, they must come with “Apostille” or “Consulate authentication” no more than 60 days old (Art. 10 in fine). Companies trading their shares in an Official Stock market (either in Costa Rica or in a foreigner country), will be excluded from this obligation. However, there is regulation pending to be issued which will define how this will be applied. Companies administrating third parties financial resources, if registered, authorized and supervised by SUGEF, will be excluded from reporting the info of their clients. 
     


    Shareholder is a foreign entity or Trust, What to do?

    If the entity´s shareholder is a foreign entity or trust, then the information about its final Beneficiaries and proof must also be provided and submitted, (with Apostille or Consular authentication). If it becomes impossible to get that information, after making all the efforts to get the info and produce proof of it, the legal representative of the Costa Rican company must submit a declaration under oath with the respective proof. In this case, it will be understood that the legal representative or administrator of the foreigner entity or trust is the final beneficiary. 
     


    What has to be reported?

    In the respective report, it must be included the name of the natural person having direct or indirect control on the company, entity or legal structure, and the following, (when applies):
    • How the voting rights are split;
    • Information about who is having the right to appoint or remove most of the administrators, board of directors or supervisor (“Fiscal”);
    • Information about who has the control according to the bylaws;
    • How the shares and any other participation is split among the Beneficiaries.
     

    How about Trust, what needs to be done?

    Trusts must report information about the object or purpose in the Trust Agreement and the name and info of the Trustors, Trustee and any Beneficiary.
    Please remember that as of today, there are still some regulations that are in process to be enacted. Therefore, part of the info in this article may changes. 
     


    When do I file?

    As it was told above, it is expected that the Registry will start working on September 2019, but for this first time and to avoid system saturation, the reports must be submitted in a different month depending on the last digit of the official ID (“cédula juridica”) of each entity or structure. All of this according to the following chart:
     


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