The CJEU ruling in the case of Sovin SA v Luxembourg Business Registers found that the EU beneficial ownership register regime, as amended by the Fifth Anti-Money Laundering Directive, was unlawful because it did not comply with EU Charter on Fundamental Rights provisions which protect personal data and privacy. The court held that access to beneficial ownership information went beyond what was strictly necessary to prevent or detect money laundering and terrorist financing.
In a new policy paper, the UK government has confirmed its view that the new register of overseas entities, established by the Economic Crime (Transparency and Enforcement) Act 2022 (and to be amended by the Economic Crime and Corporate Transparency Bill), is compliant with the privacy provisions in Article 8 of the European Convention on Human Rights, to which the UK remains a signatory. In terms of access to personal details, safeguards built into the bill allow individuals to ask the registrar to suppress information from the public register where, for example, that information could put them or their household at serious risk. Similar provisions are to be added to the UK’s register of persons of significant control (PSC) and register of beneficial owners (RBO) which, the government says ‘will ensure that the PSC and RBO disclosure regimes do not unjustifiably establish blanket intrusions into PSCs’ and RBOs’ Article 8 rights’.
As Tax Policy Associates’ Dan Neidle points out, this is one example of where the UK is free to depart from EU policy, although it seems likely that the EU will review its privacy laws in due course.
The CJEU decision has drawn criticism from many angles. Maíra Martini, corrupt money flows expert at Transparency International, said: ‘At a time when the need to track down dirty money is so plainly apparent, the court’s decision takes us back years. Recognising that public scrutiny serves as a powerful deterrent to financial crime, the 5th EU Anti-Money Laundering Directive of 2018 required countries to open up their beneficial ownership registers to all members of the public. This provision made the EU anti-money laundering legislation the most progressive at the time, but the CJEU has now erased such progress.’
The CJEU ruling in the case of Sovin SA v Luxembourg Business Registers found that the EU beneficial ownership register regime, as amended by the Fifth Anti-Money Laundering Directive, was unlawful because it did not comply with EU Charter on Fundamental Rights provisions which protect personal data and privacy. The court held that access to beneficial ownership information went beyond what was strictly necessary to prevent or detect money laundering and terrorist financing.
In a new policy paper, the UK government has confirmed its view that the new register of overseas entities, established by the Economic Crime (Transparency and Enforcement) Act 2022 (and to be amended by the Economic Crime and Corporate Transparency Bill), is compliant with the privacy provisions in Article 8 of the European Convention on Human Rights, to which the UK remains a signatory. In terms of access to personal details, safeguards built into the bill allow individuals to ask the registrar to suppress information from the public register where, for example, that information could put them or their household at serious risk. Similar provisions are to be added to the UK’s register of persons of significant control (PSC) and register of beneficial owners (RBO) which, the government says ‘will ensure that the PSC and RBO disclosure regimes do not unjustifiably establish blanket intrusions into PSCs’ and RBOs’ Article 8 rights’.
As Tax Policy Associates’ Dan Neidle points out, this is one example of where the UK is free to depart from EU policy, although it seems likely that the EU will review its privacy laws in due course.
The CJEU decision has drawn criticism from many angles. Maíra Martini, corrupt money flows expert at Transparency International, said: ‘At a time when the need to track down dirty money is so plainly apparent, the court’s decision takes us back years. Recognising that public scrutiny serves as a powerful deterrent to financial crime, the 5th EU Anti-Money Laundering Directive of 2018 required countries to open up their beneficial ownership registers to all members of the public. This provision made the EU anti-money laundering legislation the most progressive at the time, but the CJEU has now erased such progress.’
