The ECJ has on the 22 November 2022 declared invalid the provision of the Fifth European Union Anti-Money Laundering Directive that requires EU countries to provide public access to beneficial ownership registers.
In a ruling, the Court found that the 5th AMLD is too loosely framed and provides for overly-wide public access to the registers without a proper justification of the necessity and proportionality of the interference with the rights to privacy and personal data protection of the beneficial owners.
The Court recognises that the objective of the AMLDs is to combat money laundering and terrorist financing and that “creating an environment hostile to criminals and that improving the overall transparency of the Union’s economic and financial environment could constitute a powerful deterrent” (Para 55). It also states that achieving this objective could justify “even serious interferences” to the right to privacy and the right to data protection (Para 59).
Furthermore, applying the criteria of the General Data Protection Regulation (GDPR, 2016) the Court recognises that giving the public access to beneficial ownership is indeed “appropriate” for “preventing money laundering and terrorist financing, since the public nature of that access and the resulting increased transparency contribute to the creation of an environment less likely to be used for such purposes” (Para 67).
The Court’s conclusion, however, is that given that general public access is neither strictly necessary (Para 76) nor proportionate (Para 82) this cannot justify the interference with privacy and personal data protection and hence considered those provisions of AMLD5 are invalid.
As a result of the above-mentioned judgement, the Malta Business Registry has taken immediate action by providing limited access to the register of beneficial owners to competent authorities and subject persons only.