Privacy And Regulatory Compliance ' European And BVI Perspectives

Published date25 November 2022
Subject MatterCorporate/Commercial Law, Government, Public Sector, Privacy, Compliance, Corporate and Company Law, Data Protection, Money Laundering
Law FirmForbes Hare
AuthorMr José Santos and Patrick Colegrave

Judgment of the Court in Joined Cases C-37/20 | Luxembourg Business Registers and C-601/20 | Sovim S.A.

The long-awaited decision of the European Court of Justice in Luxembourg Business Registers and Sovim S.A. (Cases C-37/20 and C-601/20 respectively) has been given. The Court has held that the provision in the anti-money laundering directive whereby the 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 interference with the rights guaranteed by the Charter of Fundamental Rights of the European Union entailed by that measure is neither limited to what is strictly necessary nor proportionate to the objective pursued.

Background

In accordance with the anti-money-laundering directive, a Luxembourg law adopted in 2019 established a Register of Beneficial Ownership and provided that a whole series of information on the beneficial owners of registered entities must be entered and retained in that register. Some of that information was accessible to the general public (including in particular information that was accessible by internet search). The law also provided that a beneficial owner may request Luxembourg Business Registers (LBR), the administrator of the Register, to restrict access to such information in certain cases.

In that context, the Luxembourg District Court was seized of two actions, brought by a Luxembourg company and its beneficial owner, who had previously unsuccessfully requested LBR to restrict the general public's access to information concerning them. The Luxembourg District Court considered that the disclosure of such information is capable of entailing a disproportionate risk of interference with the fundamental rights of the beneficial owners concerned, it referred a series of questions to the European Court of Justice for a preliminary ruling concerning the interpretation of certain provisions of the anti-money laundering directive and the validity of those provisions in the light of the Charter of Fundamental Rights of the European Union (the 'Charter').

The Court of Justice held that the provision of the anti-money-laundering directive whereby Member States must ensure that the information on the beneficial ownership of corporate and other legal entities incorporated within their territory is accessible in all cases to any member of the general public is invalid. In the view of the Court, the...

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