The European Court of Justice (ECJ) has struck down the Anti-money-laundering Directive’s provision, which made the information on the beneficial ownership of companies available to the public.
In its ruling of November 22nd, 2022, the fundamental rights of the beneficial owners, namely the respect for private and family life and the protection of personal data, ended up prevailing over the interests of Directive 2015/849, which seeks to increase transparency to prevent money laundering and terrorist financing.
This dichotomy has been an ongoing issue. On the one hand, the Anti-money-laundering Directive pursues a legitimate interest, capable of interfering, to a certain extent, with the fundamental rights of the owners of companies. But, on the other hand, such interference must be limited to what is strictly necessary or, otherwise, the legislation in place is disproportional.
That being said, the ECJ stated that a public register was appropriate to prevent money laundering and terrorist financing but unnecessary, as less intrusive measures seem equally capable of achieving the objectives pursued by the Directive.
Despite the repercussions of this judgement remaining unclear, following the ECJ’s decision, Member States have begun to conceal the company ownership register from the general public. Hence, one may understand that the former regime has now been reinstated, meaning the register is only accessible to members of the public who can show a legitimate interest, obliged entities and competent authorities, such as financial fraud investigators and banks.
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