by David Phelan November-30-2022 in Commercial & Business
In a judgment dated 22 November 2022, the European Court of Justice (the “ECJ”) has decided that open public access to the beneficial owner registers of EU member state companies is no longer valid. It found that public access contravenes articles 7 and 8 of the Charter of Fundamental Rights of the European Union (the “Charter”).
The ECJ was ruling on a challenge to the Fourth Anti-Money Laundering Directive (“AMLD”), which obliged member states to make information on the beneficial owners of companies, and other legal entities incorporated in their jurisdictions, accessible in all cases to every member of the general public.
The Court held that the general public’s access to information on beneficial ownership constitutes a serious interference with the fundamental rights to respect for private life and to the protection of personal data, which are provided for in Articles 7 and 8 of the Charter, respectively. In its judgment, the ECJ found that the Fourth AMLD was neither limited to what was strictly necessary nor proportionate to its aims of preventing money laundering and terrorist financing. In fact, it found that the information disclosed enabled a potentially unlimited number of persons to find out about the material and financial situation of a beneficial owner.
It would appear that the effect of the judgment is that the provisions of the Fourth AMLD now apply such that a legitimate interest needs to be proved before information regarding the beneficial ownership of an entity will be made publicly available. In the absence of a definition of “legitimate interest”, it remains to be seen how this will play out.
Almost immediately following the ECJ judgment, EU member states have started suspending access to their beneficial owner registers for companies, including the Register of Beneficial Owners (“RBO”) in Ireland. It remains unclear whether the AMLD may be further amended in order to allow public access in situations beyond where there is a legitimate interest.
For more information on this topic, please contact David Phelan of this office.
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David Phelan
David is Head of the Commercial & Business team at Hayes solicitors and advises a number of the firm’s major corporate clients. He advises on a wide range of corporate and commercial law issues. He has expertise in advising on general corporate and commercial matters, particularly in the manufacturing, retail, aviation, sports and motor sectors, and also frequently advises clients who operate in regulated areas.