Ruling [LU] ¦ Luxembourg Court Imposes Fine for Failure to Register Beneficial Owners

Luxembourg Court Imposes Fine for Failure to Register Beneficial Owners

Introduction

In a recent ruling dated May 14, 2025, the District Court of Luxembourg held a limited liability company, SOCIETE1, accountable for failing to comply with the legal obligations under Luxembourg’s Law of January 13, 2019, regarding the registration of beneficial owners. This case highlights the increasing scrutiny on transparency in corporate ownership and the consequences for companies that neglect their compliance duties.

Background of the Case

The case stemmed from SOCIETE1’s failure to submit timely information to the Register of Beneficial Owners (RBE). Despite reminders from the Luxembourg Business Registers and formal summons by the Public Prosecutor’s Office, SOCIETE1 did not register details about its beneficial owners within the legally prescribed deadline, which was six months after the law’s effective date. The law requires companies to disclose comprehensive personal data about individuals who ultimately own or control them, including names, birth details, nationalities, residential addresses, and the nature and extent of their interests.

In addition, SOCIETE1 was accused of failing to publish its annual financial statements for the fiscal year 2023 within the legally mandated timeframe. However, the court acquitted the company on this charge, noting that such an obligation is personally incumbent on the company’s manager rather than the company itself.

Bastian Schwind-Wagner_Follow "Luxembourg’s judiciary is reinforcing corporate transparency by penalizing companies that fail to register their beneficial owners on time. This case underscores the critical importance of compliance with anti-money laundering laws and EU directives."

Court’s Findings and Legal Basis

The court found that SOCIETE1 had deliberately failed to meet its obligations concerning the registration of beneficial owners. The ruling emphasized that the failure was not merely oversight; it was a knowing violation of transparency laws designed to combat money laundering and terrorist financing, which Luxembourg has aligned with European Union directives and international standards.

The court referred to Articles 20 and 34 of the Law of January 13, 2019, which impose penalties on entities that omit or delay such registrations. SOCIETE1 was fined €1,250, a relatively modest amount considering the potential maximum penalty of €1,250,000. The fine was fully suspended due to mitigating factors such as the company’s cooperation, sincere remorse expressed by its representative, and a clean prior record.

Implications for Companies and Compliance Officers

This judgment serves as a clear reminder that companies operating in Luxembourg must prioritize compliance with beneficial ownership registration requirements. Transparency is no longer optional but a legal duty enforced with tangible penalties. Compliance officers should ensure their organizations are fully aware of deadlines and documentation requirements related to beneficial ownership disclosures.

Furthermore, while this ruling acquitted SOCIETE1 on the financial statement publication charge due to legal responsibility being personal to managers, companies must recognize that failure in compliance areas can lead to serious consequences either at the corporate or individual level. Maintaining up-to-date records and timely reporting is essential to prevent legal exposure.

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