In response to the decision of the European Court of Justice, the Dutch government has temporarily closed access to the register of ultimate beneficial owners of companies - UBO (ultimate beneficial owners). Finance Minister Sigrid Kaag briefed Parliament on the situation in letter.
What is a UBO registry?
As a reminder, the UBO registry was created as part of the implementation of the EU Anti-Money Laundering Directive, according to which Member States must ensure that the general public has access to information on the ultimate beneficial owners of legal entities. The registry is designed to help in the detection of criminal activity, in the prevention of fraud, money laundering and terrorist financing.
From March 27, 2022, owners are required to register in this registry. The deadline for entering data is January 1, 2023 (read more about this in our article). However, according to October statistics, only about 68% of owners did so.
Registry Access
For 2,50 euros, anyone could request information from the Chamber of Commerce and Industry (Kamer van Koophandel, KVK), which maintains the UBO register. The public nature of the registry has been discussed for some time. For example, Privacy First has already filed a lawsuit against the Dutch state in 2020. The Foundation understands that the owners of organizations should be on the register, but does not agree that anyone can get information about them for 2,50 euros.
Now the European Court of Justice has ruled that public access to the UBO registry is contrary to the rules on the protection of personal data. The registry may work, but not in the public domain. The case in which the European Court ruled did not concern the UBO registry of the Netherlands, but Luxembourg. But since all EU countries operate UBO registries in accordance with European law, there is a good chance that this decision will have consequences for the Netherlands as well. The Ministry of Finance is currently studying the solution and is consulting with the European Commission.
Aftermath
Minister Kaag writes that the closure of information in the registry makes it difficult to conduct investigations. Therefore, the prosecutor can still access the data through the relevant request. According to the minister, the decision to close the registry may also have financial implications, since the registry is funded by fees that users pay for familiarizing themselves with the information in it.
According to the European Court of Justice, it is not necessary for the fight against money laundering that information about a company be available to the general public. Public access to the register of business owners is contrary to the right to privacy. The ruling states that wide access to this information is a serious violation of confidentiality and protection of personal data. Minister Kaag has promised an investigation to decide whether the register will be closed temporarily or permanently.
