ECJ invalidates the access to beneficial ownership information by general public of the AML directive

In a breakthrough ruling unveiled on November 22nd  2022, the European Court of Justice gave conclusions on the case 2022-912 between Luxembourg Business Register and Sovim, in what will surely resonate as a landmark decision in terms of access to ultimate beneficial ownership information and business registers access more largely.


The text of the judgement is available here  https://curia.europa.eu/juris/documents.jsf?num=C-37/20 and  you can also access the ECJ press release here: https://curia.europa.eu/jcms/upload/docs/application/pdf/2022-11/cp220188en.pdf.


The major conclusion of the case is that the ECJ has invalidated article 1(15) c of the 5th AML directive which granted public access to Ultimate Beneficial Ownership registers, the major argument for this invalidation being that this overrides too much of the fundamental rights of the EU charter,  mainly data protection and privacy rights.  


The justification brought up is that the interference with the rights guaranteed by the Charter entailed by that measure is neither limited to what is strictly necessary nor proportionate to the objective pursued. According to the Court, the general public’s access to information on beneficial ownership constitutes a serious interference with the fundamental rights to respect for private life and to the protection of personal data, enshrined in Articles 7 and 8 of the Charter, respectively. The court argued  that the information disclosed enables a potentially unlimited number of persons to find out about the material and financial situation of a beneficial owner. Furthermore, the potential consequences for the data subjects resulting from possible abuse of their personal data are exacerbated by the fact that, once those data have been made available to the general public, they can not only be freely consulted, but also retained and disseminated.


Direct effects and contraction of availability of UBO can be expected to follow this decision. It came to our knowledge that following the announcement, the Dutch business register which enabled a fee-access to UBO register has now stopped providing access to UBO information.


In order to assess the impact of the decision and the forthcoming changes that may occur in EU and national regulatory landscape, FEBIS will be conducting soon a survey on the issue.


If you see similar movements in closing or restricting  access to UBO in your respective countries, please report it to us via secretariat@febis.org


FEBIS Regulatory Committee will be watching this subject closely in the next meetings and keep you informed of any developments through our blog and monthly newsflash.


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