Shell companies underlie monitoring for over a year

Two registers of beneficial owners create unnecessary administrative burden in Slovakia, lawyers think.

Cyprus is considered a major hub for shell companies. (Source: AP/TASR)

The Register of Public Sector Partners (RPVS) has been recording all companies that receive public funds in Slovakia for more than a year, but has the register led to real results in the detection of shell companies?

Lawyers from Taylor Wessing, who prepared the anti-shell law with the Justice Ministry, consider its first stage successful. It’s priority lays in ensuring the rapid verification and registration of companies with the state, according to Andrej Leontiev, a partner at the Taylor Wessing law firm. While the number of verified entries exceeds 13,000, the ultimate beneficial owners from Cyprus, a major hub for shell companies, only make up about 10 entries.

“This may indicate that beneficial owners have also been forced to make the owner’s structure more transparent and real,” Leontiev told The Slovak Spectator.

Application of the law, however, has revealed some of its shortcomings, like the impact on transactions where it is not expedient or legitimate and leads to the discontinuity of multiple registers. Hence, the ministry is now preparing an amendment to solve these problems.

Since the latest law came into effect, the submitter has dealt with questions related to the interpretation of ambiguous legislation and electronic services of the registry, said Slovak Justice Minister Gábor Gál.

“The submitter has solved all these inconsistencies by methodical guidance, which led to the stabilisation of some issues and techniques in practice,” Gál told the Slovak Spectator.

A systematic step

RPVS came into existence with the changes in the anti-shell legislation in February 2017. The introduction of the register was a systematic step, the importance of which is gradually increasing thanks to the increasing amount of data on the beneficiaries and introduction of further legislation, according to ethics watchdogs from the Fair-Play Alliance.

The significance is also growing with the introduction of legislation abroad, said Peter Kunder of Fair-Play Alliance.

Read more: How many entries has the Žilina District Court recorded so far? Why do lawyers think two registers are unnecessary?

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