CJEU on disclosure of beneficial owner information

The case before the CJEU concerned Luxembourg law. In accordance with the AML Directive, Luxembourg created a Register of Beneficial Owners containing information on the beneficial owners of registered entities. The information is publicly available on the internet. In the present case, a Luxembourg company and its beneficial owner sought before the Luxembourg courts that the access to this information be restricted, on the grounds that the publication of the information exposes him and his family members to the risk of kidnapping, deprivation of personal freedom, violence or even death. In the proceedings, Luxembourg courts of higher instances referred a series of prejudicial questions to the CJEU on the interpretation of certain provisions of the AML Directive, its validity, and on the possible conflict between the disclosure of beneficial ownership information to the public and the interference with fundamental human rights.

Provision interferes with the right to private life and personal data protection

In judgments C-37/20, C-601/20, the CJEU held that the provision of the AML Directive under which member states must ensure that information on beneficial owners registered in the registers in their territory is accessible in all cases to any member of the general public is invalid. According to the CJEU, such publicly available information allows an unlimited number of persons to be informed about the factual and financial situation of the beneficial owner, which constitutes serious interference with an individual’s right to private life and personal data protection.

The purpose of the provision is to prevent illegal activities by increasing transparency; according to the CJEU, this pursues a general interest objective which can justify even serious interference with human rights. However, the CJEU found that the interference that this measure entails is neither limited to what is strictly necessary nor proportionate to the objective pursued, which are the conditions for allowing such interference.

Finally, it should be mentioned that the Luxembourg legislation in principle allowed the public to access all personal data of beneficial owners, including their full date and place of birth. Czech legislation differs from the Luxembourg one in this respect: under Czech law, the register available online contains only the name, surname, month and year of birth, nationality, and country of residence. It is therefore not yet clear how the future amendment to the AML Directive will be treated by Czech legislators and the European Union in general, as other changes concerning beneficial owners and the AML Directive are currently being debated. We have no doubt that the registration of beneficial owners will continue to evolve.