This is an important ruling by the Court of Justice of the European Union on November 22, 2022 regarding the register kept by each Member State, in accordance with the Directive 2015/849 (“4th Anti-Money Laundering Directive”) containing information on the beneficial owners of companies and other legal entities incorporated on their territory.
As a reminder, pursuant to the Directive 2018/843 (the “5th Anti-Money Laundering Directive”), which amends the 4th Anti-Money Laundering Directive, EU member states are required to make the aforementioned register of beneficial owners available to “any member of the general public”.
In this judgment of November 22, 2022, the Court invalidates the 5th Anti-Money Laundering Directive, in its part relating to the register of beneficial owners, on the grounds that public access to such information constitutes “a serious interference with the fundamental rights to respect for private life and to the protection of personal data” enshrined in Articles 7 and 8 of the Charter of Fundamental Rights of the European Union (the “Charter”).
After qualifying these data availability to the general public as processing of personal data, the Court of Justice emphasizes the seriousness of such interference with fundamental rights in view of the information communicated on this register, but also in view of the unlimited number of people who can consult, store and disseminate them.
According to the Court of Justice, this interference, although lawful and justified by an objective of general interest – preventing money laundering and terrorist financing – is not limited to what is strictly necessary and is not proportionate.
In this respect, it notes in particular that data types made available to the general public are not sufficiently defined or identifiable.
Therefore, the Court of Justice concludes that the system set up by the 5th Anti-Money Laundering Directive infringes considerably more seriously the fundamental rights guaranteed by Articles 7 and 8 of the Charter than the 4th Anti-Money Laundering Directive, without this aggravation being compensated by any benefits.
This decision will have a significant impact in the European Union since each Member State will have to analyze its consequences and effects on its national register of beneficial owners.
The European Commission will have to modify the existing directive to comply with this decision of the ECJ.