On Jan. 23, 2023, ECJ published the final judgment in this case, dated Nov. 22, 2022 for reference, and to highlight the basis of the judgment that was made at the time.
In May 2023, TRSP INTL urged EC to uphold transparency in AMLD6, see #171767.
On Nov. 22, ECJ ruled data should not be accessible to general public.
ECJ ruled invalid AMLD provision whereby information on beneficial owner of company incorporated within EU is accessible in all cases to any member of the general public.
The interference with the rights guaranteed by EU Charter entailed by that measure is neither limited to what is strictly necessary nor proportionate to the objective pursued.
Per AMLD, Luxembourg law adopted in 2019 established Register of Beneficial Owners.
The same law provides that whole series of information on beneficial owners of registered entities must be entered and retained in that register.
Some of that is accessible to the general public, in particular through the Internet.
Law also provides that beneficial owner may request Luxembourg Business Registers (LBR), administrator of Register, to restrict access to such information in certain cases.
Luxembourg District Court was seized of 2 actions, brought by Luxembourg company and its beneficial owner, respectively, which had previously unsuccessfully requested LBR to restrict the general public’s access to information concerning them.
That court considered the disclosure capable of entailing disproportionate risk of interference with fundamental rights of beneficial owners concerned and referred case.
I.e. via preliminary ruling to ECJ regarding the interpretation of certain AMLD provisions and validity of those in light of EU Charter of Fundamental Rights arts 7-8.
Ruling and Reasoning
ECJ, sitting in Grand Chamber, held that per Charter, AMLD provision re Member States ensuring data on beneficial ownership of corporate, other legal entities incorporated within their territory is accessible in all cases to the general public is invalid.
General public’s access to information on beneficial ownership constitutes a serious interference with fundamental rights to respect to private life, personal data protection
As enables potentially unlimited persons to know beneficial owner's financial situation.
Also potential consequences for data subjects from possible abuse of personal data.
Exacerbated as once data is available to general public can be retained, disseminated.
AMLD rule objective is general interest, capable of justifying even serious interferences with fundamental rights enshrined in arts 7-8 of Charter, and general public’s access to information on beneficial ownership is appropriate to contribute to achieve objective.
Yet, interference entailed by that measure is not limited to what is strictly necessary nor proportionate to objective as e.g. public not sufficiently defined and identifiable.
Amounts to considerably more serious interference with guaranteed fundamental rights than the former regime where access to data was better delimited/defined.
Increased interference not capable of being offset by any benefits which might result from new regime in terms of combating money laundering and terrorist financing.
Even if it may be difficult to provide detailed definition of circumstances and conditions under which legitimate interest exists, as relied upon by EC, is no reason for the EU legislature to provide for the general public to access the information in question.
Optional provisions allowing States to make data on beneficial ownership available on condition of online registration, provide in exceptional circumstances for exemption from access are not, in themselves, capable of demonstrating proper balance.
I.e. objective of general interest pursued and fundamental rights enshrined in Charter.
Nor the existence of sufficient safeguards enabling data subjects to protect their personal data effectively against the risks of abuse.
Dec. 6, 2022 EP Statement
On Dec. 6, 2022, EP 6th AML directive co-rapporteurs expressed surprise at judgment and said competent authority/financial intelligence unit access must not be affected.
Document dated Dec. 6, 2022, was received on Jan. 5, 2023 due to a fixed feed.
Reaction of some authorities to go beyond ruling by closing and/or limiting registers even for competent authorities and obliged entities, would increase laundering risk.
Draft report on proposed AMLD6 includes improved access to register, see #155693.
EP will focus on reflecting ECJ decision in AML rules/explore access for those involved in AML/CFT, with LIBE and ECON committees' votes on report expected mid-Mar. 2023.
Jan. 2023 Judgment Published
On Jan. 23, 2023, ECJ published the final judgment in this case, dated Nov. 22, 2022 for reference, and to highlight the basis of the judgment that was made at the time.
In May 2023, TRSP INTL urged EC to uphold transparency in AMLD6, see #171767.
Regulators
ECJ; EP
Entity Types
CNSM; Corp
Reference
OJ 2023/C 24/03, 1/23/2023; PR 20221206IPR61201, 12/6/2022; LR, PR 188/2022, 11/22/2022; Cases C-37/20, C-601/20; AMLD Dir 2015/849, Dir 2018/843, Dir 2018/1673; SLV2 Reg 2015/35, Dir 2009/138; CRD/CRR Dir 2013/36, Reg 575/2013; EMIR Reg 648/2012; Law 1/13/2019
