The ruling arose in the course of a referral by the Luxembourg District Court to the Court of Justice of the European Union (CJEU) for a preliminary ruling concerning the interpretation of certain provisions of the fifth anti-money laundering directive (the 5 AMLD) and the compatibility of those provisions with the Charter of Fundamental Rights of the European Union (the Charter).

In line with the requirements of the 5 AMLD, a Luxembourg law had established a Register of Beneficial Ownership. Some of the information relating to beneficial owners was accessible to the general public, in particular, through the Internet. There was a provision whereby a beneficial owner may request Luxembourg Business Registers (LBR), the administrator of the Register, to restrict access to such information in certain cases. A request to restrict the general public's access to information concerning them had been made by a Luxembourg company and also by the beneficial owner of such company. This request had been refused and the matter came before the Luxembourg District Court. It was concerned that the level of disclosure of such information was capable of giving rise to a disproportionate risk of interference with the fundamental rights of the beneficial owner concerned and it referred a series of questions to the CJEU for a preliminary ruling on the interpretation and validity of the relevant provisions of the 5 AMLD with the Charter.

On 22 November, the CJEU held that the provision whereby the relevant beneficial ownership information on the register of beneficial ownership is accessible in all cases to any member of the general public is invalid.

The Court reasoned that allowing the general public unrestricted 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 Articles 7 and 8 of the Charter, respectively (i.e. the right to respect for private and family life and the right to the protection of personal data). The Court commented that the information required to be disclosed enables a potentially unlimited number of persons to find out about the material and financial situation of a beneficial owner. The Court further noted that once this data was made available to the general public there was scope for such data to be retained and disseminated, such that it becomes difficult (or illusory) for the relevant data subjects to defend themselves effectively against subsequent abuse.

However, the Court acknowledged the policy underpinning the 5 AMLD to prevent money laundering and terrorist financing constituted an objective of general interest capable of justifying even serious interferences with the fundamental rights enshrined in Articles 7 and 8 of the Charter. It further acknowledged that the general public's access to information on beneficial ownership is in principle appropriate for contributing to the attainment of that objective.

However, the Court took issue with the level of interference envisaged by the right of public access and said it was neither limited to what is strictly necessary nor proportionate to this objective.

The court noted the provisions at issue allow for personal data to be made available to the public which are not sufficiently defined and identifiable and that the regime introduced by the 5 AMLD amounts to a considerably more serious interference with the fundamental rights guaranteed in Articles 7 and 8 of the Charter than the former regime under the fourth anti money laundering directive (4 AMLD). This provided for not only access by the competent authorities and certain entities, but also for access by any person or organisation capable of demonstrating a legitimate interest. The Court noted that while it may be difficult to provide a detailed definition of the circumstances and conditions under which such a legitimate interest exists, this is no reason for the EU legislature to provide for the general public to access the information in question. The Court also said that the optional provisions which allow Member States to make information on beneficial ownership available on condition of online registration and to provide, in exceptional circumstances, for an exemption from public access to that information, respectively, are not, in themselves, capable of demonstrating either a proper balance between the objective of general interest pursued and the fundamental rights enshrined in Articles 7 and 8 of the Charter, or the existence of sufficient safeguards enabling data subjects to protect their personal data effectively against the risks of abuse.

Comment

It should be noted that in the case of the Luxembourg register almost all of the information held by the national register can be accessed by the public. The Court's approach reinforces its previous case law on the need, even where the point at hand relates to issues of significant public policy or public interest (such as preventing money laundering and terrorist financing), to ensure that any associated processing of personal data is undertaken in a proportionate way and only undertaken so far as strictly necessary in view of the aims pursued. The ruling suggests that when making beneficial ownership information publicly accessible Member States must ensure that appropriate safeguards are in place to protect privacy and personal data of the beneficial owners.

Note: Following the recent judgment by the European Court of Justice the search facility on the RBO register for beneficial ownership information is now suspended.

The RBO is currently working on providing access for Designated Persons only. See https://rbo.gov.ie/.