On 22 November 2022, the Court of Justice of the European Union (the “ECJ”) ruled that access to the UBO register for any member of the general public infringes the right to respect for private and family life and he right to the protection of personal data. With reference to this judgment, the Dutch Finance Minister sent a letter to the Lower House of Parliament on 20 January 2023. This letter contains an analysis of said judgment and a discussion of the consequences for the accessibility of the UBO register.
The obligation for Member States to include the Ultimate Beneficial Owners (“UBOs”) of companies in a register follows from the Fourth EU Anti-Money-Laundering Directive (“AMLD4”). It followed from Article 30 (5) of this Directive that three categories had to have access to the UBO register. These categories were the following:
- competent authorities and Financial Intelligence Units;
- Obliged entities; and
- persons or organisations that can demonstrate a legitimate interest.
In 2018, the fifth Anti-Money-Laundering Directive (“AMLD5”) was adopted. This Directive included a change to in the third above-mentioned category. The third category was replaced by ‘any member of the general public’. The requirement of having a legitimate interest was no longer set in AMLD5.
The present judgment of the ECJ marks the end of this amendment. The ECJ held that access to the UBO register for any member of the general public is invalid, since it is contrary to the right to respect for private and family life and the right to the protection of personal data, as set out in the Charter of Fundamental Rights of the European Union. Therefore, the ECJ ruled that the Fourth Anti-Money-Laundering Directive must be reverted to. This means that persons or organizations that wish to access information from the UBO register must be capable of demonstrating a legitimate interest.
What does this mean for the Netherlands?
Although the European Anti-Money-Laundering Directive(s) imply a minimal harmonization, Finance Minister Kaag has argued that the prevention of money laundering and terrorism financing offers no sufficient basis to maintain more drastic measures than those proposed by the European Union. For the Netherlands, this means that the Trade Register Act 2007 will have to be amended. At present, this Act still provides that anyone can access the UBO register. Most likely, ‘anyone’ will be changed to ‘all persons or organizations capable of demonstrating a legitimate interest’. It is not known yet which persons and categories will be included in this definition. The power of competent authorities, Financial Intelligence Units and obliged entities to access the UBO register remains unchanged, and Minister Kaag has confirmed in her letter that access for these categories will be restored as soon as possible.
What happens next?
It is not clear at present what the law amendment will look like exactly. A list of objective indicators has been suggested, which may be used to determine whether a legitimate interest exists. However, it cannot be excluded that individual assessments will be necessary in some cases.
Although the law will not be enforced until 01 February 2023, Minister Kaag emphasized that the obligation to register is still in force. If you have questions about the UBO register, or if you need help with your registration of the UBO at the Chamber of Commerce, please do not hesitate to contact us. We will be happy to help you.
