12.12.2022 13:10
Please note an important ruling of the European Court of Justice of the European Union regarding the beneficial ownership register (UBO).
According to the CJEU, access by any member of the general public to information on beneficial ownership constitutes a serious infringement of certain fundamental rights, namely the right to respect for private life and to the protection of personal data.
In the CJEU’s view, this serious infringement is not justified by its purpose, i.e. the fight against money laundering and terrorist financing.
Some EU countries (e.g. the Netherlands and Austria) have already suspended public access to their UBO registers. The impact of the CJEU’s decision on the legal regulation of beneficial ownership in the Czech Republic is not yet known as the Ministry of Justice of the Czech Republic has not commented on the situation to date. However, it is likely that the Czech rules regarding the UBO register and possibly other public registers, which also allow access by the general public to the registered personal data, will also see changes.
On 22 November 2022, the Court of Justice of the European Union ruled to temporarily suspend the effect of Directive (EU) 2018/843, i.e. it ruled that Article 30(5)(c) of the Directive, which allowed access to beneficial owner information to the general public, was invalid.
According to the CJEU, access by the general public to beneficial ownership information constitutes a serious infringement of the fundamental rights to respect for private life and to protection of personal data. Indeed, the information made available allows for a profile to be created with certain personal data, including the financial situation of the person concerned and links to economic sectors, countries and specific companies in which the beneficial owner invested, thus enabling a potentially unlimited number of persons to gain information about the financial standing and assets of the person registered in the register of beneficial owners.
In the view of the CJEU, this serious interference is not justified by the Directive´s purpose, i.e. the fight against money laundering and terrorist financing.
However, it remains undisputed that financial institutions and entities subject to the reporting obligation must continue to have access to the UBO register. The decision only concerns the disclosure of data to the general public.
Some EU countries (e.g. the Netherlands and Austria) have already suspended public access to their UBO registers. The impact of the CJEU’s decision on the legal regulation of beneficial ownership in the Czech Republic is not yet known as the Ministry of Justice of the Czech Republic has not commented on the situation to date. However, it is likely that the Czech rules regarding the UBO register and possibly other public registers, which also allow access by the general public to the registered personal data, will also see changes.
We will keep you informed of further developments going forward.