Thread by @OpenOwnership

Today’s European Court of Justice (@EUCourtPress) judgement on public access to beneficial ownership information is significant, and our team is analysing it closely:

https://twitter.com/EUCourtPress/status/1594981785217241091

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Here’s our take on what it’s about and why it matters:

At the centre of the case is a fundamental question: is the infringement on privacy brought about by giving the general public access to beneficial ownership (BO) information justified and proportionate in order to achieve the stated policy aim?

The Court has ruled that in the case of the EU 5th anti-money laundering directive (5AMLD), which requires Member States to have publicly accessible beneficial ownership registers, ...

... the part that requires BO information to be ‘accessible in all cases to any member of the general public’ is invalid. Why?

The Court finds that the infringement on privacy brought about by the requirement for BO information ‘accessible in all cases to any member of the general public’ is neither proportionate nor justified...

... In addition, the public information isn’t limited to what is strictly necessary.

Compared to the previous AMLD4 requirement for BO registers (which were only accessible to law enforcement, competent authorities and those demonstrating legitimate interest), ...

... the Court found that the increased interference with privacy is not ‘offset by any benefits’ in terms of combatting money laundering and terrorist financing.

There are a lot of details our team is still working through, but there are a couple of things we’re sure of:

This doesn’t mean the end of beneficial ownership registers - in the EU or elsewhere! The judgement is just concerning BO information being ‘accessible to the public in all circumstances’ for the purpose of fighting financial crime...

... Indeed, the ruling doesn’t say that public access is absolutely not justified, but that as provided for under AMLD5 has not been sufficiently justified given the extent of infringement on privacy, for the specific purpose of anti-money laundering.

Still, this is already being interpreted as a major step back from the EU’s leading position on beneficial ownership transparency (BOT). Evidence shows that public access enables countries to realise impact on the broadest range of policy goals, ...

... and in practice it’s proven by far the most efficient way to ensure all users - from journalists to foreign law enforcement - can actually and effectively access and use the information.

There are a number of lessons that we can take from this case so far...

... It highlights the importance of looking holistically at BOT, and the drawback of legislating for beneficial ownership transparency solely as an anti-money laundering tool rather than putting in place a more broadly defined policy benefit.

While anti-money laundering policies are still a key driver for BOT reforms, BOT has expanded well beyond this, and is now being used in multiple other policy areas...

... Countries such as the UK have legislated for public access to BO information which does not focus on the crime-fighting value add of the general public having access to information, but instead on the broad public interest in having this information available.

The case also highlights the importance - as our work across countries outside the EU shows - of legislating for beneficial ownership transparency in line with data protection and privacy legislation.

These debates are the next phase in the development of robust legislation and implementation of beneficial ownership reforms around the world...

... It’s work we look forward to contributing to in the EU and beyond, and we’ll be publishing more in depth views from our team following detailed analysis.

The ruling:
curia.europa.eu/juris/document…

#ECJ press release (EN):
curia.europa.eu/jcms/upload/do…