Member States’ EU Public beneficial ownership registers, a requirement set by the 5th Anti-Money Laundering Directive (AMLD5), have been recently suspended as a result of an EU Court of Justice ruling.
On 22 November, the Court of Justice of the European Union (CJEU) enacted a binding judgement against the Luxembourg authorities (Joined Cases C‑37/20 and C‑601/20) holding that the Anti-money-laundering Directive (AMLD5) provision requiring Member States to ensure that any member of the general public has access to information on the beneficial ownership of companies and of other legal entities incorporated within their territory is invalid. While the Register of Beneficial Ownership is considered by regulators as a key pillar and a priority in the fight against money laundering and terrorism financing; the CJEU argued 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’, enshrined in the Charter of Fundamental Rights of the European Union. Following the CJEU’s judgement, several EU Governments, such as Luxembourg, Germany, Austria, the Netherlands, Belgium and Cyprus, suspended public access to their registers. The co-rapporteurs of the upcoming 6th Anti-Money Laundering Directive (AMLD6), Luděk Niedermayer (EPP, Czechia) and Paul Tang (S&D, Netherlands), reacted to the authorities’ reaction with a common statement, characterising these actions as ‘unjustified’. They also highlighted the importance of finding a balance between protecting the fundamental rights to private life and the protection of personal data with the need to effectively fight against money laundering and terrorist financing.
As next steps, with the Anti-money-laundering Directive currently under revision, the EU institutions are evaluating how to amend the legislation to abide by the CJEU’s decision. An official from the European Commission said that 'the European Commission is thoroughly analysing the implications of this judgement in order to assess what types of amendments are needed to the EU framework as a result’ and ‘discussing with co-legislators (European Parliament and Council of the EU) to ensure full compliance’. On the European Parliament side, co-rapporteurs Luděk Niedermayer and Paul Tang pointed out that the judgement surprised them and that ‘limiting the access for competent authorities and obliged entities […] would lead to a substantial risk of an uptake of money-laundering’. Finally, the co-rapporteurs noted that they will work with the European Commission and Council of the EU to make sure that AMLD6 reflects the decision of CJEU while “looking for possibilities to provide access” to authorities in the fight against ML/FT [1]. A vote on AMLD6’s report in the leading ECON and LIBE Committees is expected in mid-March 2023.
[1] Concerning next steps in the EP, a vote on AMLD6’s report in the leading ECON and LIBE Committees is expected in mid-March 2023. The Council of the EU has adopted a common position on the legislation. Inter-institutional negotiations are expected in Q2 2023.
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