CJEU: WM and Sovim SA v. Luxembourg Business Registers (Joined Cases C-37/20 and C-601/20)
Rethinking Transparency of Ultimate Beneficial Owners Registers
DOI:
https://doi.org/10.46282/blr.2023.7.2.725Keywords:
Register of Beneficial Owners, AML, Sovim Case, Transparency, Data Protection, Right to Privacy, CJEUAbstract
Rules against money laundering and terrorist financing are an area of law in which the European Union is significantly active and introduces many innovations. Public registers of beneficial ownership were one of the crucial tools with which this legislation promoted the openness of corporate structures in the European environment. For this reason, the judgment of the European Court of Justice in the Joined Cases C-37/20 and C-601/20, WM and Sovim SA v. Luxembourg Business Registers, which cancelled public access to beneficial ownership registers, caused an immense response. Part of the public sees this step as a major blow to the transparency and part as a victory for the rights of individuals. This paper explains the factual situation in the given case, summarises the Advocate General's opinion and analyses the reasons that led the Court to the presented conclusions. The author also reflects on the jurisprudence of the Court, which led to the issuance of this decision and its importance in the field of AML and the protection of the right to privacy in general. Based on these facts, the conclusion presents the possible development of future beneficial ownership registers in the EU.
References
Brewczyńska, M. (2022). Privacy and data protection vs public access to entrepreneurs' personal data. Score 2:0: How did the ECJ balance the rights to privacy and data protection against transparency of Ultimate Beneficial Owners registries in WM and Sovim SA v Luxembourg Business Registers?. EUROPEAN LAW BLOG. NEWS AND COMMENTS ON EU LAW, published on 15 December 2022. Available at: https://europeanlawblog.eu/2022/12/15/privacy-and-data-protection-vs-public-access-to-entrepreneurs-personal-data-score-20/ (accessed on 18.12.2023).
Haberly, D., Shipley, T. and Barrington, R. (2023). Corruption, shell companies and offshorefinancial secrecy: directions for anti-corruption policy. Brighton: Centre for the Study of Corruption, University of Sussex.
Kuşkonmaz, E. (2023). The Grand Gala of PNR Litigations: Case C-817/19, Ligue des droits humains v Conseil des ministers. European Constitutional Law Review, 19(2), 294–319, https://doi.org/10.1017/S1574019623000111
Milaj, J. and Kaiser, C. (2017). Retention of data in the new Anti-money Laundering Directive—'need to know' versus 'nice to know'. International Data Privacy Law, 7(2), 115–125, https://doi.org/10.1093/idpl/ipx002
Miller, R. A. (Ed.). (2017). Privacy and Power. Cambridge: Cambridge University Press.
Mooij, A. M. (2023). Reconciling transparency and privacy through the European Digital Identity. Computer Law & Security Review, 48, 105796, https://doi.org/10.1016/j.clsr.2023.105796
Noseda, F. (2022). FATCA, CRS and Public BO registers: a report on the direction of travel—the next 12 months. Trusts & Trustees, 28(6), 482–487, https://doi.org/10.1093/tandt/ttac067
Panico, P. (2020). Private Foundations and EU beneficial ownership registers: towards full disclosure to the general public?. Trusts & Trustees, 26(6), 493–502, https://doi.org/10.1093/tandt/ttaa055
Prince Michael von und zu Liechtenstein, H. S. H. (2017). Public register: a populist tool to control the citizen. Trusts & Trustees, 23(6), 693–695, https://doi.org/10.1093/tandt/ttx068
Radon, J. and Achuthan, M. (2017). Beneficial Ownership Disclosure: The Cure for the Panama Papers Ills. Journal of International Affairs, 70(2), 85–108, https://www.jstor.org/stable/90012622
Siems, M. (2023). Privacy vs. Shareholder Transparency: Did the ECJ Decision in WM and Sovim SA Impair the Global Fight Against Money Laundering?. Common Market Law Review, 60(4), 1137–1152, https://doi.org/10.2139/ssrn.4540817
Charter of Fundamental Rights of the European Union, No. 2000/C 364/01 (2000) (European Union).
CJEU, judgment of 9 November 2010, Volker und Markus Schecke and Eifert, Joined Cases C-92/09, C-93/09, ECLI:EU:C:2010:662.
CJEU, judgment of 18 June 2020, Commission v Hungary (Transparency of Associations), C‑78/18, EU:C:2020:476.
CJEU, judgment of 5 April 2022, Commissioner of An Garda Síochána, C-140/20, ECLI:EU:C:2022:258.
CJEU, judgment of 21 June 2022, Ligue des droits humains, C-817/19, ECLI:EU:C:2022:491.
CJEU, judgment of 1 August 2022, Vyriausioji tarnybinės etikos komisija, C-184/20, ECLI:EU:C:2022:601.
CJEU, judgment of 22 November 2022, Luxembourg Business Registers, Joined Cases C-37/20, C-601/20, ECLI:EU:C:2022:912.
Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC. (4th AML Directive).
Directive (EU) 2018/1673 of the European Parliament and of the Council of 23 October 2018 on combating money laundering by criminal law. (6th AML Directive).
Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU. (5th AML Directive).
European e-Justice Portal (2023). Beneficial ownership registers interconnection system European e-Justice Portal. Available at: https://e-justice.europa.eu/38590/EN/beneficial_ownership_registers_interconnection_system_boris?EUROPEAN_UNION&action=maximize&idSubpage=1&member=1 (accessed on 18.12.2023).
European Parliament (2023). New EU measures against money laundering and terrorist financing. NEWS European Parliament, published on 28 March 2023. Available at: https://www.europarl.europa.eu/news/en/press-room/20230327IPR78511/new-eu-measures-against-money-laundering-and-terrorist-financing (accessed on 18.12.2023).
FATF (2019). Best Practices on Beneficial Ownership for Legal Persons. FATF, published on October 2019. Available at: https://www.fatf-gafi.org/en/publications/Methodsandtrends/Best-practices-beneficial-ownership-legal-persons.html (accessed on 18.12.2023).
FATF (2023). The FATF Recommendations 2012 (as amended in November 2023). FATF, Available at: https://www.fatf-gafi.org/en/publications/Fatfrecommendations/Fatf-recommendations.html (accessed on 18.12.2023).
France, Constitutional Court, Decision 2016-591 QPC of 21 October 2016 "Miss Helen S.".
OPEN OWNERSHIP (2023). Open Ownership map: Worldwide action on beneficial ownership transparency. OPEN OWNERSHIP. Available at: https://www.openownership.org/en/map/ (accessed on 18.12.2023).
Opinion of the Advocate General G. Pitruzzella, 20 January 2022, Joined cases C - 37/20 and C - 601/20, ECLI:EU:C:2022:43. Available at: https://curia.europa.eu/juris/document/document.jsf;jsessionid=69E74B75F4B50CF56DF19D9B35E5126F?text=&docid=252461&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=715948 (accessed on 18.12.2023).
Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation).
Tax Justice Network (2022). EU court returns EU to dark ages of dirty money. Tax Justice Network, published on 23 November 2022. Available at: https://taxjustice.net/press/eu-court-returns-eu-to-dark-ages-of-dirty-money/ (accessed on 18.12.2023).
Downloads
Published
How to Cite
Issue
Section
Categories
License
Copyright (c) 2023 Bratislava Law Review
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
The Author(s) transfers copyright to the Article to the Publisher of the Journal by the Licence Agreement.
The Author(s) retains rights specified in the Licence Agreement.
The readers may read, download, copy, distribute, print, search, or link to the full texts of all of the Article of the Journal and use them for any other lawful purpose under specified Creative Commons Licence (CC BY-NC-ND 4.0).
