We previously announced that, since 27 September 2020, companies have been able to register their UBOs in the UBO Register: UBO Register: register by 27 March 2022. There are now doubts as to the legal validity of the register in question.
Interim relief proceedings
Privacy First has brought summary proceedings against the state, seeking to have the UBO register suspended with immediate effect. Privacy First objected to two aspects of the UBO register:
- the obligation to register the UBO’s personal data;
- the public availability of general information about the UBO.
The judge hearing the application for interim relief dismissed Privacy First’s claim. However, the judge does see grounds for doubt regarding the legal validity of the UBO register. The public nature of the UBO register could potentially be in breach of the principle of proportionality. Its public nature is an obligation arising from the Fifth Anti-Money Laundering Directive. The ruling on the legality of the European Directive is reserved for the European Court of Justice.
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).
The case is currently pending. It is not yet clear when a judgement will be handed down.
Defer enrolment
Appearance 27 March 2022 Companies are required to register their UBOs. As there is still plenty of time to complete the registration, it may be wise to postpone it for the time being. It is possible that the Court of Justice of the European Union may have already issued a ruling before the deadline expires, which would ensure that less information about the UBO is made public.
Would you like more information about the UBO register? If so, please also read this article: UBO register also approved by the Senate