European Court of Justice rules on the Register of Beneficial Ownership
In a judgment dated 22 November 2022, the European Court of Justice (the “ECJ”) ruled that public access to the registers of beneficial owners of companies in EU member states is no longer valid. In practice, this will mean that our clients will no longer have guaranteed access to reports on the beneficial ownership of companies from the Central Register of Beneficial Ownership of Companies and Industrial and Provident Societies (the “RBO”). This restriction may have implications for requests for documentation pursuant to Know-Your-Customer (“KYC”) guides, as RBO Reports can no longer be accessed and can no longer form part of a KYC request.
Companies registered in an EU member state are required to make filings of the ownership of the company under the Anti-Money Laundering Directive (“AMLD”). The Fourth AMLD provided that only members of the public who could prove a legitimate interest could access these registers. The Fifth AMLD required that these registers of ownership were fully accessible to the public. The ECJ ruled that public access to these registers contravenes the Charter of Fundamental Rights of the European Union (the “Charter”), and according to the ECJ “constitutes a serious interference with the fundamental rights to respect to private life and to the protection of personal data”.
The ECJ made it clear that the prevention of money laundering and terrorist financing was of general interest and is an objective that could justify interference to a certain extent with the fundamental rights of privacy and personal data protection. However, the ECJ ruled that the disclosure of information on a company’s register of beneficial ownership can create a risk of interference with a beneficial owner’s fundamental rights under the Charter. The ECJ ruled that the Fifth AMLD was an interference with a person’s fundamental rights under the Charter and was disproportionate to the objectives of the AMLD.
In Ireland, the RBO has already blocked the search facilities previously available on the RBO at the date of publication. It is possible that permission to access the registers will only be given to designated persons on the RBO over the coming weeks.
For more information please contact our Aviation & Asset Finance team.