Is public access to corporate ownership information in the EU gone forever?

In a judgement last November, the European Court of Justice (ECJ) struck a damaging blow to corporate transparency. The Court ruled that the public's access to information on the human owner(s) of a company (i.e., beneficial owners) is a serious interference with fundamental rights like a private life and the protection of personal data set out in the European Union (EU) Charter of Fundamental Rights.  

The beneficial ownership ruling has had a near immediate effect. Six European countries, including Luxembourg, the Netherlands, Ireland, and Malta must now end public access to beneficial ownership information for companies created in each jurisdiction. This is alarming as each have been criticized for poor corporate transparency, sweetheart tax arrangements, or money laundering vulnerabilities.

The provisions on public access to corporate ownership information in the 2018 EU directive made the EU anti-money laundering legislation the most progressive at the time. It reinforced beneficial ownership registers as a key tool in identifying and understanding corporate structures with the potential for achieving greater accountability and other financial transparency objectives such as tackling corruption and illicit financial flows.

While the Court’s ruling represents a major setback for corporate transparency it addressed some important aspects of the directive. It defined terms for justifying even serious interferences into privacy and data rights and recognized that civil society and the media have a legitimate interest in accessing such information, given their role in the fight against money laundering.

Fortunately, EU legislators may remedy the limitations to public access to beneficial ownership information in current revisions of the anti-money laundering directive. The new directive should guarantee public access to the information and include provisions that reconcile public access and privacy and security concerns.