The European Court of Justice (ECJ) has pronounced itself in a landmark judgement deeming public access to the beneficial owner registers for companies in the EU member states is no longer valid. This decision was arrived at based on articles 7 and 8 of the Charter of Fundamental Rights of the European Union (the Charter). These articles deal with the respect for private and family life and the protection of personal data.
The requirement for Member States to make beneficial owner registers accessible to the public came around by virtue of the amendment to the Fourth Anti-Money Laundering Directive (AMLD) on the 30th of May 2018. The ECJ delivered this decision in the Joined Cases C-37/20 - Luxembourg Business Registers and C-601/20 Sovim. It took the view that:
- In a press release the ECJ said 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.”
- The ECJ therefore felt that public free access constitutes an unnecessary 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.
- In relation to the AMLD the ECJ said that for the purposes of combatting money laundering one could justify even a an interference with the fundamental rights enshrined in Articles 7 and 8 of the Charter.
- However, it then held the requirement under the Fifth AMLD amendment to be excessive and not in proportion to the intended objective and it therefore deemed this to be invalid.
The effect of this judgement will be felt in all the Member States. Business registries around the EU will need to implement access rights or amend current accesses in order to apply restrictions so that only individuals with a legitimate interest would have access from the public. The Malta Business Registry has issued a notice on the 25th of November 2022 where the Registrar outlined the judgement of the ECJ and confirmed that it would immediately be limiting access to the register of beneficial owners to competent authorities and subject persons only.
The European Court of Justice (ECJ) has pronounced itself in a landmark judgement deeming public access to the beneficial owner registers for companies in the EU member states is no longer valid. This decision was arrived at based on articles 7 and 8 of the Charter of Fundamental Rights of the European Union (the Charter). These articles deal with the respect for private and family life and the protection of personal data.
The requirement for Member States to make beneficial owner registers accessible to the public came around by virtue of the amendment to the Fourth Anti-Money Laundering Directive (AMLD) on the 30th of May 2018. The ECJ delivered this decision in the Joined Cases C-37/20 - Luxembourg Business Registers and C-601/20 Sovim. It took the view that:
- In a press release the ECJ said 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.”
- The ECJ therefore felt that public free access constitutes an unnecessary 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.
- In relation to the AMLD the ECJ said that for the purposes of combatting money laundering one could justify even a an interference with the fundamental rights enshrined in Articles 7 and 8 of the Charter.
- However, it then held the requirement under the Fifth AMLD amendment to be excessive and not in proportion to the intended objective and it therefore deemed this to be invalid.
The effect of this judgement will be felt in all the Member States. Business registries around the EU will need to implement access rights or amend current accesses in order to apply restrictions so that only individuals with a legitimate interest would have access from the public. The Malta Business Registry has issued a notice on the 25th of November 2022 where the Registrar outlined the judgement of the ECJ and confirmed that it would immediately be limiting access to the register of beneficial owners to competent authorities and subject persons only.