CJEU – Public anti-money laundering registers are invalid and violate the EU Charter of Fundamental Rights

CJEU – Public anti-money laundering registers are invalid and violate the EU Charter of Fundamental Rights

 

On November 22, 2022, the Grand Chamber of the Court of Justice of the European Union invalidated the provisions, of the EU Directive 2018/843, relating to the publication of the beneficial ownership registers. Before this judgement the beneficial ownership registers of companies incorporated within the EU, were accessible to every citizen of any country within the EU.

This information was decided to be made accessible to the public in order to combat and prevent possible money laundering or terrorist financing attempts within the Union. It is important to tackle any possible money laundering attempt, however, the information disclosed was easily accessible to anyone and there was also no way to prevent this personal information of each individual from being captured or spread even further. The Court found that this kind of disclosure of personal information to the general public is incompatible with the EU Charter of Fundamental Rights.

The EU Directive 2015/849 stated that all member states of the EU must create a register of beneficial ownership where the name, nationality, and ownership interest of the owner of each legal entity in every member state, would be disclosed.

This Directive was then amended by the EU Directive 2018/843, which required for all of this personal information to be made accessible to every citizen of each EU member state. This was done in an attempt to deter potential financial crime by allowing a wider range of people to follow this information.

The CJEU still ruled, after thorough analysis of the benefits and potential risks, of the disclosure of such personal information to be unnecessary, invalid, and in violation of privacy rights of the persons involved. The possible abuse of the available information on the financial and material situation of each beneficial owner is inevitable, therefore this kind of information should not be made available to the general public.