The Essence of the Beneficial Owner Institute, its International Regulation and Possibilities for Improvement in the Legal Framework of the European Union and Latvia. Summary of the Doctoral Thesis

Abstract

The Thesis examines the problem of the beneficial owner, which is so relevant today in the field of prevention of money laundering. In the course of research, not only the true nature of the beneficiary institute, its historical development and place in the modern legal regulation, but also the shortcomings in the regulatory acts both at the international level and in Latvia have been examined. Guided by the stated aim of the work, by analysing in detail the international and national legal regulation on the beneficial owners, the need to improve this regulation is substantiated and specific solutions are offered for the clarification of state practice and the development of amendments to regulatory acts. The Doctoral Thesis consists of four chapters and several subchapters, in which both the development of the institute of the beneficial owner over the years is studied, and practical cases are analysed, from which the problematics of defining the beneficial owners and the uncertainty of the types of exercised control in the regulatory acts are derived. The first chapter explores the origin of the beneficial owner institute, its historical development and its connection with the trust institute. The framework of the international and European Union regulation regarding the institute of the beneficial owner has also been studied. The second chapter focuses on the specifics of determining the beneficial owner in different legal entities, going into the definition and determination of the beneficial owner of each entity. In the achievement of the aim of the work, the most important, i. e. the third chapter analyses in detail the cascade test resulting from international regulatory acts, each of its stages and its definition in Latvian legal acts. Using case analysis, the effectiveness of the cascade test as a practical method of determining the beneficial owner and the type of exercised control in practice has also been evaluated. The fourth chapter on its part focuses on the mechanisms and competence of the state authorities in the verification of the submitted information about the beneficial owners and the evaluation of the effectiveness thereof. The research is interdisciplinary and touches not only upon the field of international law and civil law, but also international relations and international economics. Supranational legal acts and international cooperation mechanisms have been studied, as well as economic sanctions as a tool for achieving political goals have been evaluated. The interaction of the mentioned areas is crucial in the comprehensive analysis of the research problematic. The main conclusions of the Thesis are related to the finding of deficiencies in the Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing, and in the practice of applying the norms of the Enterprise Register. As a result, proposals have been made for several amendments to the Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing, which are related to the clarification of the definition of the beneficial owner, the provision of the types of exercised control in the law, the expansion of the competence of the Enterprise Register in the termination of the activities of dishonest capital companies, as well as the unified definition of the cascade test. Proposals have also been made regarding amendments to the Law on the Enterprise Register of the Republic of Latvia, offering to expand the competence of the Enterprise Register in verifying the documentary justification of the control exercised by the beneficial owner. The purpose of these proposals is to ensure the truthfulness, accuracy and up-to-dateness of the information available in the public register about the beneficial owners of various legal entities.