New Act for suppliers of the public sector in Slovakia
The National Council of Slovak republic approved a new Anti-Letterbox-Company Act No. 315/2016 Coll. on Register of Public Sector Partners (hereinafter referred to as the "Act on Register of Public Sector Partners " or "the Act"), whose purpose is to stipulate the legal definition of the requirements for a natural person and legal entity with which the state or the public law entities enter into legal relationships, alternatively where third parties accept payments from the state at the statutory level. Within this article, we provide a brief preview of the issue regulated by the Act on Register of Public Sector Partners.
The essence of the legal regulation is the conditionality of the access and the subsequent use of public funds within the statutory limits by the registration of entities in the register of public sector partners. Registration of the public sector partner reveals its ownership structure to the level of the ultimate final beneficiaries that are the natural persons who actually control the public sector partner. Definition of the final beneficiaries is laid down in the section 6a of the Act No. 297/2008 Coll. on the Prevention of Legalization of Proceeds of Criminal Activity and Terrorist Financing and on Amendments and Supplements to Certain Acts.
The Act regulates the procedure leading to identification of the final beneficiary, while it establishes the registration procedure. Under the registration procedure, it is necessary to understand not only the act of entering of the data into the register, but also the procedure of changing of already entered data as well as the procedure of erasing of the data from the register. Not only the public sector partner but also the authorized person, who submitted the proposal on behalf of the public sector partner to the register, is responsible for registering the final beneficiary. According to the Act the authorized person is a lawyer, a notary, a bank, an auditor or a tax advisor. The legal regulation responds to the changes that may occur in the capital structure of the public sector partner, as it assumes the subsequent identification of the final beneficiaries. The Act sets forth so-called verification event which purpose is to verify the final beneficiary again, e.g. verification once a year to the 31.12 of the calendar year, in relation to the transaction at the statutory limit, in the case of the conclusion of the contract, etc. The Registry Court is the District Court in Žilina.
Regarding the registration of the public sector partner to the register, the Act exhaustively defines the requirements for the content of the documents filed into the register. In case the application for the registration concerns only the final beneficiary, the verification document is drawn up. If the application for the registration concerns also the authorized person, an attachment to the application for registration is also the declaration of the authorized person that he has no relationship with the public sector partner as well as the written agreement on fulfilment of the obligations of the authorized person for the public sector partner.
The public sector partner shall be registered in the register of the public sector partners at least for the duration of the contract on the grounds of it receives the public funds.
In case the breach of abovementioned conditions occurs, as well as in case of the registration of the incomplete or incorrect data into the register, a penalty may be imposed on the public sector partner. The penalty may be imposed in a form of the impossibility to conclude the contract with the state or with the public law entities, deleting of the public sector partner from the register of public sector partners as well as in the form of the fine in the amount of EUR 10.000 to EUR 1.000.000.
The authorized person is liable for the payment of the abovementioned fine. The authorized person is not obligated to pay a fine, if he proves that he has acted with a professional care.
In case that the District Court of Žilina as a Registry Court decides to delete the public sector partner from the register or decides to impose a fine, the decision is the basis for the registration of the statutory body of the public sector partner to the register of the disqualified persons and it is also connected with additional legal limitations for the statutory body of the public sector partner.
In conclusion it may be stated to the Act on Register of Public Sector Partners that the new legislation brings the transparency in the handling of public funds, particularly in a form that the register helps to identify persons who achieves from trading with the state respectively by receiving of the public funds the greatest benefit. However, the real contribution of the Act cannot be evaluated nowadays considering the short term of its effectiveness, as well as the number of unanswered questions that the new legislation has brought and have not been answered yet.