ECJ Beneficial Owner Register Data

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.
  • Follows LUX GVT law of Jan. 2021 creating register of beneficial owners, see #36732.
  • Luxembourg Register of Beneficial Owners
  • 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.

Regulators ECJ
Entity Types CNSM; Corp
Reference LR, PR 188/2022, 11/22/2022; Cases C-37/20, C-602/20; AMLD 2015/849, Dir 2018/843; Law 1/13/2019
Functions AML; Anti-Bribery; Compliance; Legal; Privacy; Registration/Licensing; Risk; Tax; Technology
Countries European Union; Luxembourg; Cross-Border
Category National Regulator
Products Corporate
Regions EMEA
Rule Type Enforcement
Rule Date 11/22/2022
Effective Date 11/22/2022
Rule Id 154143
Linked to N/A
Reg. Last Update 11/22/2022
Report Section AML & Enforcement

Last substantive update on 11/23/2022