By Dr Louisa Borg Haviaras and Elena Koushios Hadjidemetriou
On November 22, 2022, the Court of Justice of the European Union (CJEU) declared invalid the part of the European Union’s Anti Money Laundering Directive that allowed public access to registries about companies’ beneficial owners – the people who actually own or control them.
In its ruling of CJEU, Grand Chamber, 22 November 2022, Joined Cases C‑37/20 and C‑601/20, WM and Sovim SA v Luxembourg Business Registers the court stated that public access to beneficial ownership information conflicted with the EU’s right to privacy and personal data protection.
Following the ruling, however, the court issued a clarification stating that member states should follow the provisions of the EU’s Fourth Anti-Money Laundering Directive of 2015, which means that members of the public, including journalists and civil society, can access beneficial ownership registers if they have a ‘legitimate interest’ in doing so.
Immediately after the ruling some member states stopped and/or suspended access to beneficial ownership information. Some other member states tried to find a practical arrangement so that data could be accessed while others have already taken measures to regulate ‘legitimate interest’.
So far there has been lack of a harmonised approach as to journalists’ and civil organisations’ legitimate interest in accessing data and this seriously impairs the fight against money laundering in Europe and beyond.
This might be linked to the fact that member states’ commitment to combating money laundering varies across Europe while the recognition of the importance journalists and civil society play varies across European member states too. However, it was access to beneficial ownership register that enabled journalists and other individual actors to expose politicians’ conflicts of interest, sanctioned Russian elites, hidden assets by politically exposed persons, cases of tax avoidance, money laundering and corruption.
Consequently, accessing public registry has benefited the public interest and that is why anti-corruption experts and civil society groups have raised serious concerns supporting the view that organised crime, politicians, officials, or oligarchs will find it easier to launder their ill-gotten assets in Europe without detection.
A year after the ruling from the CJEU, Transparency International’s assessment of the accessibility of EU beneficial ownership registers shows that in almost half of the member states journalists and representatives of civil society cannot access the required information or face difficulties in proving their legitimate interest.
At the same time the approach to legitimate access varies significantly from member state to member state. For example, in Italy current rules do not include specific reference to journalists and/or civil society organisations; in Luxembourg only local journalists can have access while in Germany legitimate interest access is analysed on a case-by-case basis. Last but not least in Malta, Cyprus and the Netherlands access is denied despite demonstration of legitimate interest.
In the light of the above, the upcoming sixth EU Anti-Money Laundering Directive is expected to address this issue so that corporate transparency is ensured and that no space is left for discrimination and arbitrary interpretation of the court’s ruling.
After all public access will enable the work of those who try to expose organised crime and corruption around the world.
