On Nov. 22, 2022, the Court of Justice of the European Union (the Court) ruled that access to UBO register for any member of the population violated the right to respect for private life and the right to protection of personal data. On January 20, following this ruling, the Minister of Finance sent a letter to the House of Representatives. This letter contains an analysis of the above ruling and discusses the implications 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 European Anti-Money Laundering Directive (AMLD4). It followed from Article 30(5) of this Directive that three groups had to have access to the UBO register. These groups were:
competent authorities and Financial Intelligence Units;
Notifiable institutions; and
individuals and organizations that can demonstrate a legitimate interest.
The fifth anti-money laundering directive (AMLD5) followed in 2018. This directive brought a change to the third group mentioned above. The third category was replaced by "any member of the population. The directive no longer required a legitimate interest.
The Court's ruling now draws a line under this adjustment. The Court states that access for any member of the public to the UBO register is invalid as it violates the right to respect for private life and the right to protection of personal data, as contained in the Charter of Fundamental Rights of the European Union. Therefore, the Court states that the Fourth Anti-Money Laundering Directive must be reverted to. Individuals and organizations seeking to access information from the UBO register must thereby be able to demonstrate that they have a legitimate interest.
Although the European Anti-Money Laundering Directive(s) concern minimum harmonization, Minister Kaag argues that from the perspective of preventing money laundering and terrorist financing, there are insufficient leads to maintain more far-reaching measures than the European Union is proposing. For the Netherlands, this means an amendment to the 2007 Trade Register Act. This law currently stipulates that the UBO register can be viewed by anyone and will therefore most likely change to "all persons and organizations that can demonstrate a legitimate interest. Which individuals and groups are included is not known at this time. The power to view the UBO register for competent authorities, Financial Intelligence Units and institutions subject to a reporting obligation remains unchanged, and Minister Kaag confirmed in her letter that access for these groups will be restored as soon as possible.
Exactly how the change in the law will be designed is unclear at this time. Consideration is being given to a list of objective indicators that can be used to determine whether there is a legitimate interest. However, it cannot be ruled out that in some cases an individual assessment will have to be made.
Although it will not be enforced until February 1, 2023, Minister Kaag emphasizes that the registration requirement is still in effect. If you have any questions about the UBO register, or need assistance with UBO registration with the Chamber of Commerce, please contact us. We will be happy to assist you.
