The provision of the Directive (2015/849) on the prevention of the use of the financial system for the purpose of money laundering, according to which information on the beneficial owners of companies must in all cases be accessible to the general public, is contrary to European Union law, the Court of Justice of the EU ruled in a judgment delivered on Tuesday 22 November (cases C-37 & 601/20).
A Luxembourg company and the beneficial owner of such a company brought an action before the Luxembourg courts because they considered that the disclosure of information on beneficial owners is likely to entail a disproportionate risk of infringement of the fundamental rights of those beneficial owners. The tribunal d’arrondissement de Luxembourg (Luxembourg District Court, Luxembourg) referred a series of questions to the Court on the validity of certain provisions of the ‘anti-money laundering’ directive in the light of the EU Charter of Fundamental Rights.
The European judge ruled in favour of the plaintiffs. According to the judge, public access to information on beneficial owners constitutes a serious interference with the fundamental rights to privacy and personal data protection enshrined in Articles 7 and 8 of the Charter respectively.
The Court points to the potentially unlimited number of persons who can obtain information on the material and financial situation of a beneficial owner and the potential consequences of misuse of personal data once it is made available to the public.
That said, the European Court considers that the EU legislator is pursuing an objective of general interest in combating money laundering which may justify interference, however serious, with the fundamental rights enshrined in the Charter.
Nevertheless, it considers that the interference with public access to information on beneficial owners is a considerably more serious infringement of fundamental rights because it is neither limited to what is strictly necessary nor proportionate to the objective pursued.
The Court adds that the optional provisions of the ‘anti-money laundering’ directive, which allow Member States to make the publication of information on beneficial owners on condition of online registration and to provide in exceptional circumstances for an exemption from access to that information by the general public, are not such as to strike a balance between the general interest objective pursued and the fundamental rights enshrined in Articles 7 and 8 of the Charter. Nor do these provisions demonstrate the existence of sufficient safeguards for data subjects to effectively protect their personal data against the risks of abuse.
See the Court’s judgment: https://aeur.eu/f/46a (Original version in French by Mathieu Bion)