The European Court of Justice has ruled that public access to the UBO register is contrary to the right to privacy.
We have previously reported on several occasions that the public nature of the UBO register is under scrutiny. For example, the Privacy First Foundation has brought summary proceedings to suspend the register (read more here: The UBO register: doubts about its legal validity) and the foundation subsequently lodged an appeal (read more here: The UBO Register: Privacy First loses its appeal). The appeal was dismissed at the time because it had not been sufficiently demonstrated that the UBOs would suffer serious harm in the short term.
European Court of Justice (ECJ)
On 13 November 2020, a Luxembourg court (Case C-601/20) referred questions to the CJEU for a preliminary ruling on the public nature of the UBO register. The court has asked the CJEU whether the obligation to make the data public is lawful in the light of the right to respect for private and family life (Article 7 of the Charter) and the protection of personal data (Article 8 of the Charter).
On Tuesday, the Court of Justice of the European Union ruled that the current accessibility of the UBO register constitutes a serious interference with the fundamental rights to respect for private life and the protection of personal data. The information currently published makes it possible for virtually anyone to obtain information about the UBO. The personal data of UBOs is at risk of being misused now that it can be accessed by the general public and, consequently, stored and disseminated.
The purpose of the UBO register is to prevent money laundering and the financing of terrorism by creating a high level of transparency that makes these criminal activities more difficult to carry out. This objective serves the public interest, which may justify a serious infringement of fundamental rights. According to the Court of Justice of the European Union, the information made public in the UBO register is not strictly necessary and is not proportionate to the objective pursued. Furthermore, there are insufficient safeguards to ensure that UBOs are able to effectively protect their personal data against the risk of misuse.
Public data
Until the ruling by the Court of Justice of the European Union, the following information was publicly available in the UBO register:
- first name and surname;
- year and month of birth;
- nationality;
- household status;
- nature and extent of the economic interest (the exact size of the UBO’s interest is not disclosed, but the range within which the interest falls is: 25% – 50%, 50% – 75%, 75% – 100%).
Since the ruling by the Court of Justice of the European Union, it is no longer possible to consult the Dutch UBO register.
68% registered
By no means have all organisations registered their UBOs. On 1 October 2022, the percentage of registered organisations stood at 68. This means that 32% of companies have not yet registered their UBOs. But what are the consequences of failing to register UBOs, or registering them incorrectly or incompletely? As we wrote earlier (Failure to meet the UBO deadline: a fine or community service) classifies the failure to register UBOs as an economic offence. However, it has been stated that enforcement will be exercised with restraint pending the ruling of the Court of Justice of the European Union, which is in line with the motion which has been received by the House of Representatives concerning the request not to impose fines or community service orders for the time being.
What happens next?
Minister Kaag has since, in a Chamber letter responded to the ruling of the Court of Justice of the European Union. The UBO register is no longer accessible to the public. The register remains in place; it is simply no longer publicly accessible (at least for the time being).
The European Commission will hold consultations and carry out a further analysis to determine which disclosures of information are permissible under the ruling.