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![handle is hein.journals/ielr38 and id is 499 raw text is: INTERNATIONAL ENFORCEMENT LAW REPORTER - Volume 38, Issue 12
said U.S. Attorney for the District of Puerto
Rico, W. Stephan Muldrow.22
II. MONEY LAUNDERING,
BANK SECRECY, AND
INTERNATIONAL
HUMAN RIGHTS
European Court of Justice Rules
Beneficial Ownership Registry
Information Violate EU Privacy
Obligations
By Bruce Zagarsk
On November 22, 2022, the Grand
Chambers of the Court of Justice of the
European Union (CJEU) issued a judgment
declaring that the European Union anti-
money-laundering directive, as adopted
by a Luxembourg law in 2019, establishing
a Register of Beneficial Ownership, with
some of the information accessible to the
general public, is invalid. The
Luxembourg law makes information
accessible on at least the name, the month
and year of birth, the nationality and
country of residence of the beneficial
owner, as well as the nature and to extent
of the beneficial interest held.
The information is accessible in
all cases to: (a) competent authorities and
22 U.S. Department of Justice, Dominican Dmg Lord
Pleads Guilty to Importing Tons of Coaine into the United
States, Press Rel. Nov. 14, 2022.
1 Directive (EU) 2015/849 of the European
Parliament and of the Council of May 20, 2015 on the
[Financial Intelligence Units], without any
restriction; (b) obliged entities, within the
framework of customer due diligence; and
(c) any person or organization that can
demonstrate a legitimate interest.2
The tribunal d'arrondissement de
Luxembourg (Luxembourg District Court)
considered two suits, brought by a
Luxembourgish company (Sovim) and by
the beneficial owner of the company
(WM), respectively, which had previously
requested the Luxembourg Business
Registers (LBR), the administrator of the
Register, to restrict the general public's
access to information concerning first,
WM's status as the beneficial owner of a
real estate company and, secondly, Sovim's
beneficial owner. The court believed that
the disclosure of such information may
entail a disproportionate risk of
interference with the fundamental rights of
the beneficial owners concerned. Hence, it
referred a series of questions to the Court
of Justice for a preliminary ruling
concerning the interpretation of certain
provisions of the anti-money-laundering
directive and the validity of those
provisions in the light of the Charter of
Fundamental Rights of the European Union
(the Charter).
The Court, sitting as the Grand
Chamber, holds that, in view of the Charter
of Fundamental Rights of the European
Union (the Charter), the provision of the
anti-money-laundering directive where
Member States must ensure that 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
information on the beneficial ownership of
corporate and other legal entities
incorporated within their territory is
accessible in all cases to any member of the
general public is invalid.
The Court explained that the
general public's access to information on
beneficial ownership is a serious
interference with the fundamental rights to
respect for private life and to the protection
of personal data contained in Articles 7
and 8 of the Charter, respectively. The
Court continued that the information
disclosed in the registry enables a
potentially unlimited number of persons to
ascertain the material and financial
circumstances of a beneficial owner.
Additionally, the potential consequences
for the data subjects resulting from possible
abuse of their personal data are exacerbated
by the fact that, once that data have been
made available to the general public, it
cannot only be freely reviewed, but also
retained and disseminated.
According to the Court, the EU
directive seeks to prevent money
laundering and terrorist financing by
establishing, by means of increased
transparency, an environment less likely to
be used for those purposes. The Court
explains that the legislature pursues a goal
of general interest capable of justifying
even serious interferences with the
fundamental rights contained in Articles 7
and 8 of the Charter, and that the general's
public's access to information on beneficial
(OJ 2015 L 141, p. 73), as amended by Directive (EU)
2018/843 of the European Parliament and of the
Council of May 30, 2018 (OJ 2018 L 156, p. 43).
2 WM and Sovim SA v. Luxembourg Business Registers;
CJEU, C-37-20; C-601/20, Judgment of the Court,
Nov. 22, 2022.
468](ViewImageLocal?handle=hein.journals/ielr38&div=159&collection=&method=preview&ext=.png&size=3)