The 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’s Article requiring Member States to make information on beneficial owners of companies and other legal entities established within their territory accessible to the general public in all cases is invalid. That was ruled by the Court of Justice of the European Union in judgement delivered on 22 November 2022, which addresses the two references made by the Tribunal d’arrondissement de Luxembourg (Luxembourg District Court) to the Court of Justice for a preliminary ruling regarding the personal data transfer and the right to private and family life.
In view of the requirement Member States to keep a register containing information on the beneficial ownership of companies and of other legal entities incorporated within their territory for the purposes of combating and preventing money laundering and terrorist financing some of which information must be made accessible in all cases to any member of the general public the referring court has referred particular questions to the Court of Justice in Luxembourg in relation to the validity of the provisions of EU law establishing the system of public access to such type of information.
Referring to the Court’s settled case-law, ECJ states as its primary argument that making personal data available to third parties constitutes an interference with the fundamental rights enshrined in Articles 7 and 8 of the Charter. In its judgement the Court holds that since the data concerned include information on identified individuals, namely the beneficial owners of companies and other legal entities incorporated within the Member States’ territory, the access of any member of the general public to those data affects the fundamental right to respect for private life. In addition, making available those data to the general public constitutes the processing of personal data. The Court specifies that making personal data available to the general public in that manner constitutes an interference with the abovementioned fundamental rights, whatever the subsequent use of the information communicated (Judgment of 21 June 2022, Ligue des droits humains (C‑817/19, EU:C:2022:491, paragraph 96).
In the grounds of its judgments the ECJ points out that in so far as the information made available to the general public relates to the identity of the beneficial owner as well as to the nature and extent of the beneficial interest held in corporate or other legal entities, that information is capable of enabling a profile to be drawn up concerning certain personal identifying data, the state of the person’s wealth and the economic sectors, countries and specific undertakings in which he or she has invested. In addition, that information becomes accessible to a potentially unlimited number of persons, with the result that such processing of personal data is liable to enable that information to be freely accessed also by persons who, for reasons unrelated to the objective pursued by that measure, seek to find out about, inter alia, the material and financial situation of a beneficial owner. Тhe potential consequences for the data subjects resulting from possible abuse of their data are exacerbated by the fact that the data is being retained and disseminated.
In addition, ECJ draws attention to the fact that making available such type of data to the general public could expose the beneficial owner to a disproportionate risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation, therefore the Court’s judgement of 22 November 2022 seeks fair balance between the public and the personal interest. Nevertheless, the beneficial owners personal data shall remain accessible in all cases to competent authorities and Financial Intelligence Units.
Furthermore, as to whether the interference with the rights to respect for private life and to the protection of personal data at issue is appropriate, necessary and proportionate the Court finds that, admittedly, the general public’s access to information on beneficial ownership is appropriate for contributing to the attainment of the objective of combating and preventing money laundering and terrorist financing. In this case however the ECJ points out that this interference cannot be considered to be limited to what is strictly necessary.
Nor, moreover, as it’s apparent from the ECJ’s reasoning, is the interference in question proportionate. In this relation the Court observes that the substantive rules governing that interference do not meet the requirement of clarity and precision. The amended anti-money-laundering directive provides that any member of the general public may have access to ‘at least’ the data referred to in the second subparagraph of Article 30(5) of Directive 2015/849 and provides that Member States may provide for access to additional information, including ‘at least’ the date of birth or the contact details of the beneficial owner concerned. However, by using the expression ‘at least’, Directive 2015/849 allows for data to be made available to the public which are not sufficiently defined and identifiable.
In conclusion ECJ points out that the regime providing general public’s access to information amounts to a considerably more serious interference with the fundamental rights guaranteed in Articles 7 and 8 of the Charter compared to the previous regime and there is a lack of balance between the objective of general interest pursued and thе fundamental rights enshrined in Articles 7 and 8 of the Charter as well as lack of sufficient safeguards enabling data subjects to protect their personal data effectively against the risks of abuse.
In the light of the foregoing considerations ECJ rules in the operative part of its judgment that:
“Article 1(15)(c) of 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, is invalid in so far as it amended point (c) of the first subparagraph of Article 30(5) of 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, in such a way that point (c) of the first subparagraph of Article 30(5), as thus amended, provides that Member States must ensure that information on the beneficial ownership of companies and of other legal entities incorporated within their territory is accessible in all cases to any member of the general public.”
Тhe disclosure of beneficial ownership information – an interference with the fundamental rights guaranteed in Articles 7 and 8 of the Charter of Fundamental Rights of the European Union

Jan. 18, 2023