On 22 March this year, we announced that doubts had arisen regarding the legal validity of the UBO register (read the article here The UBO register: doubts about its legal validity). Privacy First had brought summary proceedings against the state, seeking to have the UBO register suspended with immediate effect. The judge hearing the application for interim relief dismissed Privacy First’s claim, but they did not leave it at that.
The UBO Register
Under the Fourth European Anti-Money Laundering Directive, the Netherlands is obliged to introduce a UBO register. The UBO register has been operational since 27 September 2020. The UBO register records the Ultimate Beneficial Owner (UBO) of each legal entity. In the Netherlands, the UBO register forms part of the Commercial Register. All legal entities have until 27 March 2022 to register their UBOs (for more information on the UBO register, see: UBO Register: register by 27 March 2022). In addition to public limited companies (NV), private limited companies (BV), associations and foundations, among others, even mutual funds must now be registered in the register (for further information, see: The UBO register will also apply to mutual funds)
Appeal
The Privacy First Foundation has lodged an appeal against the judgment of the judge in summary proceedings. In the summary proceedings, the judge had already expressed doubts as to whether the public nature of the register was not contrary to the principle of proportionality. However, the judge in the interim relief proceedings concluded that the assessment of the legality of the European Directive is a matter for the European Court of Justice.
In its appeal, Privacy First requested the Court of Appeal to refer questions for a preliminary ruling on the UBO register to the Court of Justice of the European Union and to suspend the operation of the UBO register until those questions have been answered. Furthermore, Privacy First asked the court to temporarily suspend public access to the UBO register, at least until the Court of Justice of the European Union has ruled on the matter.
On 16 November, the Court of Appeal dismissed Privacy First’s application for a provisional suspension of the UBO legislation. According to the court, Privacy First has not sufficiently demonstrated that the UBOs will suffer serious harm in the short term.
The sequel
We previously reported that the Luxembourg court had referred questions for a preliminary ruling to the Court of Justice of the European Union (Case C-601/20 ). A ruling from the Court of Justice of the European Union on the legality of making the UBO register generally accessible is expected in mid-2022. This will clarify whether public access will be maintained.
It is not known whether Privacy First will appeal to the Court of Cassation.
Defer enrolment
Companies must register their UBOs by 27 March 2022 at the latest. As there is therefore still plenty of time to arrange the registration, it may be wise to postpone it for the time being. Although it is not expected, it is possible that the Court of Justice of the European Union may have already issued a ruling before the deadline expires, which would result in less information about the UBO being made public.