Landmark Ruling: EU Court Of Justice invalidated a provision of Anti-Money Laundering Directive!

German prosecutors charge P2P with money laundering
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In a landmark ruling, the Court of Justice of the European Union (CJEU) invalidated a provision of the 5th EU Anti-Money Laundering Directive that guaranteed public access to information on companies’ real owners. It interferes with fundamental rights of the EU Charter. The case was sent to the CJEU from a Luxembourg court after challenges to the Luxembourg Business Registers, which disputed the compatibility of this provision with the right to privacy.

Recognizing that public scrutiny is a powerful deterrent to financial crime, the 5th EU Anti-Money Laundering Directive of 2018 required EU member states to open up their beneficial ownership registers to all members of the public. This provision made the EU anti-money laundering legislation the most progressive at the time, but the CJEU found that it constitutes a serious interference with the fundamental rights to respect for private life and the protection of personal data, as stated in Articles 7 and 8 of the Charter, respectively.

The information disclosed enables a potentially unlimited number of persons to find out about the material and financial situation of a beneficial owner. The possible abuse of personal data are exacerbated by the fact that, once those data have been made available to the general public, they can not only be freely consulted but also retained and disseminated.

It’s now time for the European Parliament and Council to rework the anti-money laundering regime. The new directive has to include precise provisions that reconcile public access with privacy and security concerns.

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