On the 22/11/2022, the Department of Registrar of Companies and Intellectual Property announced that following the Directive 2018/843 of the European Court of Justice (ECJ) whereby Member States must ensure that the information on the beneficial ownership of companies incorporated within their territory should be accessible in all cases to any member of the public is invalid. The decision of partial invalidation relates to the provision of the Directive itself and not to the transposition of the Directive into Luxembourg law, as the Luxembourg legislation is in conformity with the Directive. On the same day, because of this ruling, public access to the UBO register was suspended in several Member States, including the Republic of Cyprus.
Based to the ECJ, the access to the public to information relating to beneficial ownership constitutes a great interference with the fundamental rights to respect the private life and protection of personal data. The information disclosed enables an unlimited number of individuals to be informed about the material and economic situation of a beneficial owner. This kind of interference it seems to not justify the main purpose, which is combating money laundering and terrorist financing.
It was further explained that the public access conditional on a legitimate interest was not properly enforceable as there was a uniformity in the legitimate interest. The ECJ held that that, the fact that it can be difficult to determine precisely in which cases and under what conditions it is possible for the public to access to information relating to the Beneficial Owners, cannot justify the Union legislature specifying that all members have access to such information.
Based on the amended Directive 2015/849, Art.35, Member States are allowed to provide information of the beneficial owners through electronic registration and in exceptional cases to provide for exceptions to the public having access to such information. These exceptions by their own do not indicate a balance between the public interest objective and the fundamental rights arising from Articled 7 and 8 of the EU Charter nor do they establish the existence of adequate protections to qualify data subjects to efficiently protect their personal data against the risk of mismanagement.
Pursuant to the above, the Ministries of Justice of the Netherlands and the Grand Duchy of Luxembourg requested the Chamber of Commerce and the Luxembourg Business Registers, to stop any provision of information from the UBO Register to the public temporary and with immediate effect. Even though there is no uncertainty that due diligences have been performed by financial institutions, requests according to Art. 10, the anti-money-laundering directive will continue to be honoured.
For any further guidance regarding this procedure or if you require an initial consultation, please do not hesitate to contact our Law Firm at [email protected], +357 22 261 777 or +357 25 261 777 or please visit our office in Nicosia or Limassol.