Following the adoption of the Law of 13 January 2019 establishing a Register of Beneficial Owners (hereinafter the "RBE Law") transposing Article 30 of Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, as amended by Directive (EU) 2018/843 dated 30 May 2018 (hereinafter the "Anti-Money Laundering Directive"), entities registered within the Luxembourg Trade and Companies Register are required, since March 1st, 2019, to identify their beneficial owners and to make their identity public in the Register of Beneficial Owners (the "RBE").
As an exception to the general principle, Article 15 of the RBE Law provides that a registered entity, or a beneficial owner, may request the manager of the RBE, "in exceptional circumstances", and on the basis of a duly motivated request, to limit access to information on beneficial owners to national authorities only. According to the RBE Law, it is necessary to demonstrate that such access would expose the beneficial owner to a disproportionate risk, to the risk of fraud, abduction, blackmail, extortion, harassment, violence or intimidation or when the beneficial owner is a minor or is otherwise incapacitated.
Such exception has been very widely invoked in Luxembourg by applicants who tried to remain anonymous. Indeed, since the beginning of 2020, more than 16,000 requests for limited access have been filed. Most of these requests have been rejected by the RBE’s manager.
In case of refusal by the RBE’s manager to limit access to national authorities only, the registered entity or the beneficial owner has the right to request within 15 days to the competent court the annulment of the refusal.
Following one of these judicial claim, the Luxembourg District Court has decided to ask the Court of Justice of the European Union ("CJEU") for a preliminary ruling on the interpretation of the concepts of "exceptional circumstances", "disproportionate risk" and "risk" as set out in Article 30(9) of the Anti-Money Laundering Directive and as reproduced in the RBE Law.
Since the submission of the referral for a preliminary ruling before the CJEU, several similar cases brought before the Luxembourg courts have been suspended, pending a decision by the CJEU.
The Advocate General of the CJEU, Mr. Giovanni Pitruzzella, has rendered his conclusions on January 20th, 2022.
First, the Advocate General confirms the validity of the principle of public access to the data registered with the RBE. In his conclusions, the Advocate General considers that public access to data recorded in the RBE does indeed constitute an interference with the fundamental rights guaranteed by the Charter of Fundamental Rights of the European Union (hereinafter the "Charter"), but that this interference is not of a particularly serious nature. Nonetheless, he considers that the leeway given by the Anti-Money Laundering Directive to Member States to make additional data available to the general public other than those provided for in the Directive is invalid as it is likely to constitute a serious interference with the fundamental rights guaranteed by the Charter.
Then, the conclusions of the Advocate General of the CJEU shed interesting light on the derogatory regime that may justify a limitation to the general public’s access.
The Advocate General considers that the notion of "exceptional circumstances" must cover the 7 hypotheses provided for by the Anti-Money Laundering Directive (i.e. the risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation) but also take into account all disproportionate risks of fundamental rights’ infringement as provided for by the Charter. The Advocate General emphasizes that the national judge must interpret national law in a manner consistent with the Anti-Money Laundering Directive, and that he must therefore ensure that derogations are authorized in case of a disproportionate risk of infringement of the beneficial owner’s fundamental rights, as provided for by the Charter.
Finally, the Advocate General states that "exceptional" circumstances are to be understood as meaning circumstances out of the ordinary giving rise to a disproportionate risk of infringement of fundamental rights as provided for by the Charter. The Advocate General states that such infringements are in particular due to risks to the person’s rights to life, integrity and security as protected by the Charter.
While advocates general’s opinions are not binding on the Court, they are followed in a large number of cases. The conclusions of Advocate General Giovanni Pitruzzella are therefore very instructive as to the circumstances that are likely to be considered by the CJEU as justifying limiting public access to the information contained in the RBE. However, only the Court's decision will be binding.
The long-awaited decision of the CJEU is expected in the coming weeks.
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