29th Nov 2022
The Department of Registrar of Companies and Intellectual Property in Cyprus announced that, following the Judgement of the Court of Justice of the European Union (CJEE) in joined cases C-37/20 and C-601/20, of 22 November 2022, access to the Register of Beneficial Owners for the general public is suspended as of 23 November 2022.
On 22 November 2022, the Court of Justice of the European Union (CJEU) issued a judgment holding that the provision of the 4th EU Anti-Money Laundering Directive (Directive 2015/849), as amended by the 5th EU Anti-Money Laundering Directive (Directive 2018/843), whereby information on the beneficial ownership of companies incorporated within the territory of the Member States is accessible in all cases to any member of the general public is invalid.
The case in question was referred to the CJEU from a Luxembourg court following challenges to the Luxembourg Business Registers, which disputed the compatibility of the provision in question with the right to privacy.
By way of background, point (c) of the first subparagraph of Article 30(5) of Directive 2015/849 as amended, requires Member States to ensure that the information on beneficial ownership is accessible in all cases to ‘any member of the general public’.
The second subparagraph of Article 30(5) states that the persons referred to in point (c) must be permitted ‘to access at least the name, the month and year of birth and the country of residence and nationality of the beneficial owner as well as the nature and extent of the beneficial interest held’.
Article 30(5) adds, in its third subparagraph, that ‘Member States may, under conditions to be determined in national law, provide for access to additional information enabling the identification of the beneficial owner’, which ‘shall include at least the date of birth or contact details in accordance with data protection rules.’
The Court took the view that the general public’s access to information on beneficial ownership, provided for by the aforementioned Directive, constitutes an interference with the fundamental rights of respect for private life and protection of personal data, rights guaranteed in Articles 7 and 8 of the Charter of Fundamental Rights of the European Union.
The Court also noted that making that information available to the general public in such a manner, it would inherently render it accessible to a potentially unlimited number of persons, with the result that such processing of personal data would enable the information to be freely accessed also by persons who, for reasons unrelated to the objective pursued by that measure, seek to find out about, inter alia, the material and financial situation of a beneficial owner. That possibility would be easier when, as was the case in Luxembourg, the data in question can be consulted on the internet.
While the Court recognised that limitations may be made on the aforementioned rights and freedoms if they are necessary and genuinely meet objectives of general interest or the need to protect the rights and freedoms of others, it held that the interference entailed by the particular measure was neither limited to what is strictly necessary nor proportionate to the objective pursued. Importantly, that increased interference was not capable of being offset by any benefits which might result from the new regime – as opposed to the previous regime which provided for access by any person or organisation capable of demonstrating a legitimate interest.
Furthermore, the Court stressed that the fact that it may be difficult to provide a detailed definition of the circumstances and conditions under which such a legitimate interest exists, relied upon by the Commission, is no reason for the EU to provide for the general public to access the information in question.
The Court finally added that 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 access to that information by the general public, 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.