The European Court of Justice (“ECJ”) rendered a decision on 22 November 2022[1] in response to questions raised by the Luxembourg district court in relation to inter alia the validity of Article 1(15)(c) of AMLD V[2], amending the first subparagraph of Article 30(5) of AMLD IV[3]. Pursuant to this decision, the ECJ recognises that Article 30(5) of AMLD IV, as amended by AMLD V, constitutes a serious interference with the rights guaranteed under Articles 7 and 8 of the Charter of Fundamental Rights of the European Union (respectively respect for private and family life and protection of personal data). Consequently, the aforementioned provision is invalid.
As a brief reminder, a previous version of the AMLD IV provided that access to the register of beneficial owners should be provided to “any person or organisation that can demonstrate a legitimate interest”[4]. A subsequent amendment to this provision, introduced by the AMLD V, widened the scope of access to the register, allowing “any member of the general public” to access the register[5]. This provision was implemented in Luxembourg by an amended law of 13 January 2019 establishing the Beneficial Owner Register (the “2019 Law”).
Both the AMLD V and the 2019 Law provide for an exemption to the above requirement. Indeed, in exceptional circumstances, a limitation of access to the register may be requested where demonstration is made that such access would expose “the beneficial owner to a disproportionate risk, to the risk of fraud, abduction, blackmail, extortion, harassment, violence or intimidation or where the beneficial owner is a minor or is otherwise incapacitated”[6]. In practice and to the best of our knowledge, this exemption is very seldom granted by the Luxembourg Business Register (“LBR”). An important number of cases are currently pending in front of the Luxembourg district court on this very point.
The ECJ’s judgment takes position on two joint cases, both opposing registered entities to the LBR who had requested an exemption under Article 15(1) of the 2019 Law.
The ECJ held that the access to the register by the general public indeed constitutes a serious interference with the rights guaranteed under the Charter of Fundamental Rights of the European Union, and that this interference is neither limited to what is strictly necessary nor proportionate to the objective pursued. Consequently, Article 30(5) of the AMLD VI, as amended by the AMLD V, is invalid.
In response to the ECJ’s judgment, the Ministry of Justice, in coordination with the LBR, announced a temporary suspension of access by the public to the Luxembourg Beneficial Owners Register (the “BOR”). The LBR is further currently working on a solution to allow access to the BOR by certain professionals[7][8]. The Ministry of Justice in this respect reminds supervised entities that they “have to conduct their own analysis in the context of the verification of the identity of beneficial owners, the Register of Beneficial Owners being an additional tool allowing them to compare the result of their analysis with the data on the Register”[9].
The Luxembourg government will, as a next step, contact the European Commission in order to discuss the consequences of the ECJ’s judgment and whether solutions are contemplated at EU Level[10].
Aurélia Viémont
Partner | Avocat à la Cour
Sarah Hantscher
Managing Associate | Avocat à la Cour
Mélanie Poirrier
Managing Associate | Avocat à la Cour
Anne Picot-Guillot
Professional Support Lawyer
[1] ECJ Judgement of 22 November 2022 in Joined Cases C-37/20 and C-601/20, accessible at the following link: https://curia.europa.eu/juris/document/document.
[2] 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 (“AMLD V”).
[3] 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 (“AMLD IV”)
[4] Article 30(5) AMLD IV.
[5] Article 1(15)(c) of AMLD V.
[6] Article 15(1) 2019 Law.
[7] Meaning professionals as defined under Article 2 of the amended Law of 12 November 2004 on the fight against money laundering and terrorist financing.
[8] See homepage of the Register of Beneficial Owners: https://www.lbr.lu/mjrcs-rbe/jsp/IndexActionNotSecured.action
[9] Unofficial translation of the statement of the Ministry of Justice, accessible at the following link: https://gouvernement.lu/fr/actualites/toutes_actualites/communiques/2022
[10] See statement of the Ministry of Justice, accessible at the following link: https://gouvernement.lu/fr/actualites/toutes_actualites/communiques/2022/11-novembre/23-justice-union-europeenne.html
