As of 23rd of November 2022 the Department of Registrar of Companies and Intellectual Property announced that the access to the Register of Beneficial Owners will be suspended for the general public. (Suspension of access to the Beneficial Owners register for the general public, Knowledgebase, News | Companies Section, Department of Registrar of Companies and Intellectual Property)
This announcement was made on the basis of the ruling of the European Court of Justice (CJEE) in joined cases C-37/20 and C-601/20 on 22nd of November 2022. Specifically, the European Court of Justice ruled the above:
“Article 1(15)(c) of Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU, is invalid in so far as it amended point (c) of the first subparagraph of Article 30(5) of Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC, in such a way that point (c) of the first subparagraph of Article 30(5), as thus amended, provides that Member States must ensure that information on the beneficial ownership of companies and of other legal entities incorporated within their territory is accessible in all cases to any member of the general public.”
The main purpose of the Anti-Money Laundering Directive (2015/849)is to prevent the use of the Union’s financial system for the purposes of money laundering and terrorist financing by keeping a register which contains various information regarding the beneficial owners of the registered entities, some of the information are made accessible to the general public.
During the appeal process, regarding exception requests for the access of the general public to the beneficial owner’s information, of the joined cases C-37/20 and C-601/20 the tribunal d’arrondissement de Luxembourg (Luxembourg District Court) decided to stay the appeal proceedings and to refer some questions regarding Anti-Money Laundering Directive 2015/849 to the Court of Justice for a preliminary ruling. Those questions were the grounds for the reversal decision regarding the access to the register of beneficial owners by the general public.
The European court of Justice ruled that the Anti-Money Laundering Directive 2015/849 regulations regarding the access of the general public to the information of the beneficial owners were invalid because they were violating the right to respect the private and family life and the right of protection of personal data, enshrined respectively in Articles 7 and 8 of the Charter of Fundamental Rights of the European Union (‘the Charter’). Particularly, “derogations from and limitations on the protection of personal data should apply only in so far as is strictly necessary. It being understood that where there is a choice between several measures appropriate to meeting the legitimate objectives pursued, recourse must be had to the least onerous. In addition, an objective of general interest may not be pursued without having regard to the fact that it must be reconciled with the fundamental rights affected by the measure, by properly balancing the objective of general interest against the rights at issue, in order to ensure that the disadvantages caused by that measure are not disproportionate to the aims pursued.” In that case, the regulations were not appropriate, necessary and proportionate and were not reconciled with the Articles 7 and 8 of the Charter of Fundamental Rights.
Also, at the hearing, the Commission was not able to propose a uniform definition of the ‘legitimate interest’ and it was argued that not proposing a definition could be a risk because it might lead to excessive limitations on the access to the information on beneficial ownership. In that respect, it was noted that the fact that it may be difficult and risky to provide a detailed definition of the circumstances and conditions under which the general public may access information on beneficial ownership is no reason for the EU legislature to provide for the general public to access that information.
In conclusion and on those grounds stated above, the Register of beneficial owners that is kept by the department of Registar of Companies and Intellectual Property will not be accessible by the general public. However, access will be granted to the obliged entities by submitting to the RoC additionally a solemn declaration confirming that the information on the Beneficial Owners is requested within the context of performing customer due diligence and/or by proving an arm’s length legitimate interest to access such information.
For further information regarding Beneficial Ownership kindly refer to IMPLEMENTATION OF THE BENEFICIAL OWNERSHIP REGISTER – GIORGOS LANDAS LLC (landaslaw.com).