Executive Summary
On the 22 November 2022, the European Court of Justice ("ECJ") ruled that the changes introduced by Directive 2018/843 ("5AMLD"), allowing unrestricted public access to beneficial ownership registers, is in breach of Articles 7 and 8 of the Charter of Fundamental Rights of the European Union (the "Charter").
Serious Interference with Fundamental Rights
The ECJ criticised the unrestricted nature of public access to beneficial ownership registers and the fact that the information made available to the general public relates to the identity and personal data of the beneficial owner as well as to the nature and extent of the beneficial interest held in legal entities.
It held that the difficulty in providing a detailed definition of the circumstances and conditions under which the public may access information on beneficial ownership is no reason for the EU legislature to provide for the general public to access that information.
Furthermore, the Court noted that the principle of transparency cannot be considered an objective of general interest capable of justifying the interference with the fundamental rights guaranteed in Articles 7 and 8 of the Charter and that combating money laundering and terrorist financing is as a priority a matter for the public authorities and for entities such as credit or financial institutions and not the general public.
Impact of the ECJ Ruling
This ECJ ruling could have wide-reaching consequences on registers containing company information and demonstrates a further shift towards the protection of privacy and personal data.
Following the judgment, the search facility on the RBO register for beneficial ownership information is suspended and is providing access to "designated persons" only.
Further detail on specific circumstances and conditions under which the public may access information on beneficial ownership is likely to follow.
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