According to a ruling publicized recently, the Court of Justice of the European Union (CJEU) rescinded a provision of the 5th European Union Anti-Money Laundering Directive that guarantee public access to details on companies’ real owners.
The Court of Justice of the European Union (CJEU) ruling
The Court of Justice of the European Union (CJEU) invalidated an existing anti-money laundering rule on November 22, restricting the use of one of the most dominant tools (Register of Beneficial Owners – RBE) against financial secrecy.
A statement that came from the Ministry of Justice, about a “provisional suspension”, declared that it is no longer possible to consult this register (the RBE) online.
The Ministry added that it is presently working on a solution to ensure that those who require to access data saved in the RBE for professional purposes can continue to do so, as defined in Article 2 of the amended law of 12 November 2004 on the fight against money laundering and the financing of terrorism.
The invalidity of the Register of Beneficial Owners (RBE)
It took only a few hours in Luxembourg to take note of the judgment of the Court of Justice of the European Union (CJEU) on the invalidity of its Register of Beneficial Owners (RBE)
Concerning the directive’s purpose of combating money laundering and terrorist financing (the system launched by the Grand Duchy on 1 March 2019), the Court of Justice, which is established in Luxembourg, believes that public access to information on beneficial owners does not contribute to accomplishing this purpose.
Just a few hours after the CJEU judgment, the “principle of free access to the RBE” was discontinued.
The case (series of complaints filed in the Grand Duchy by beneficial owners against the assumed intrusive nature of the register in their private lives), and its conclusion.
This case was sent to the CJEU from a Luxembourg court after confrontation with the Luxembourg Business Registers.
One of the plaintiffs’ lawyers, emphasized that the RBE as organized in Luxembourg violated the European Charter of Fundamental Rights. Also, the Advocate General of the CJEU has his conclusions that tended to legitimize the regime of public access to information on the beneficial owners of companies.
Conclusions barely convinced the Court, so fundamental privacy law and the protection of personal data were favored to the detriment of transparency.
In general, the Ministry of Justice has decided to discontinue the online portal (Register of Beneficial Owners – RBE) where it was possible to freely consult the information it collects.
If you are considering the Luxembourg market, it is important to have an experienced ally with knowledge of local requirements. With our experience, Damalion will deliver the knowledge and information you need to do business in Luxembourg (SPF, SOPARFI, Securitization vehicles, Reserved Alternative Investment Funds). Contact your Damalion expert now.
