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The European Court of Justice Strikes Down Public Access to Beneficial Ownership Information: First Thoughts


Since May 2018, the EU has been a trailblazer in mandating public access to beneficial ownership information, i.e. records of who actually owns companies as a matter of economic reality, as opposed to formal legal ownership. This came to abrupt halt yesterday, on 22 November 2022, with the EU’s Court of Justice ruling that the respective provisions of the 5th Money Laundering Directive were invalid.

On the face of it, this judgment is a setback for corporate transparency. However, it is equally possible to view it as a course correction, not a disaster. In this post, I am going to share some preliminary reflections — or, God forgive me, a ‘hot take’ — on the news from Luxembourg.


The centrepiece of the EU’s anti-money laundering and counter-terrorist financing regime is a Directive adopted in 2015 and amended in 2018, known in its latest iteration as the 5th Money Laundering Directive, or 5MLD. Among other things, 5MLD lays out rules on the disclosure of beneficial ownership via ‘a central register in each Member State’.

Specifically, under Article 30(5) of 5MLD, information held on such a register must be made accessible to:

(a) competent authorities and [financial intelligence units], without any restriction;

(b) obliged entities, within the framework of customer due diligence (…);

(c) any member of the general public.

That is, in short, anyone. By contrast, in the pre-2018 version of the Directive, paragraph (c) provided for access for ‘any person or organisation that can demonstrate a legitimate interest’.

Limited exemptions from disclosure are available under Article 30(9), namely when it ‘would expose the beneficial owner to disproportionate risk, risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation, or where the beneficial owner is a minor or otherwise legally incapable’.

For ease of use, member states’ beneficial ownership registers are supposed to be interconnected via a single system improbably called BORIS, which so far has remained work in progress.

The Judgment

The Court of Justice’s judgment stems from two cases, both involving companies in Luxembourg. One of them, known in the judgment as YO, sought interpretation of the exemptions in Article 30(9). The other one, Sovim, contended that public disclosure was incompatible with Articles 7 (private and family life) and 8 (protection of personal data) of the EU’s Charter of Fundamental Rights.

In its joint judgment for both cases, the Grand Chamber in the Court of Justice focused on the fundamental rights argument, with the following reasoning:

  • First, the Court found that ‘the general public’s access to information on beneficial ownership (…) constitutes an interference with the rights guaranteed in Articles 7 and 8 of the Charter’ (para. 40). In assessing the seriousness of the interference, the Court deemed it relevant that such information will be available to ‘persons who, for reasons unrelated to the objective pursued by that measure, seek to find out about, inter alia, the material and financial situation of a beneficial owner’ (para. 42).
  • Second, the aim of 5MLD, which is to ‘prevent money laundering and terrorist financing by creating, by means of increased transparency, an environment less likely to be used for those purposes’, is in principle capable of justifying ‘even serious interferences with the fundamental rights enshrined in Articles 7 and 8’ (paras. 58 an 59).
  • Third, in order to be justified, an interference must be appropriate, necessary and proportionate (para. 63).
  • Fourth, the Court accepted that the interference was appropriate in light of the stated aim (para. 67), but found that it was not ‘strictly necessary’ (para. 73). In reaching that conclusion, it zeroed in on abandoning the pre-2018 requirement of ‘legitimate interest’ (paras. 68-73). In particular, the Court found little sympathy with the Commission’s argument that ‘the criterion of “legitimate interest” was a concept which did not lend itself easily to a legal definition and that (…) its application could give rise to arbitrary decisions’ (para. 71). In essence, the Court’s view was that simply because it is difficult, does not mean it should not be done (para. 72).
  • Fifth, as relates to proportionality, the Court stated that the interference at hand was outweighed by public interest in financial intelligence units and regulated businesses having access to beneficial ownership information (para. 83), but not the public at large, whose access to such data entails a greater interference with no corresponding benefit (para. 85).

It is of some interest that the Court has opted to depart from the conclusions of Advocate General Giovanni Pitruzzella, who proposed to invalidate certain minor aspects of 5MLD but would leave public access largely intact.


In essence, the judgment means that beneficial ownership information in the EU should not be available to any Tom, Dick and Harry regardless of what they want to do with it. Or, to be precise, to the continental versions of Tom, Dick and Harry — for the UK, set free from Luxembourg’s rulings, is at liberty to persist in edging towards greater corporate transparency (here’s a Brexit dividend, no less!).

With the Commission back to the drawing board, it remains to be seen what shape the new disclosure regime will take. The Court appears to have a soft spot for the ‘legitimate interest’ criterion but I, for one, as sympathetic to the Commission’s difficulties in defining it, particularly since its day-to-day application will be entrusted to the administrators of member states’ registers.

Another approach may be to expand the definition of stakeholder categories that are granted access, such as anti-corruption NGOs and journalists. This would raise practical challenges, such as defining the ‘right’ NGOs and journalists, particularly in light of the Court’s concern that beneficial ownership information should be used specifically for financial crime prevention, rather than reporting on people’s wealth. As one interviewee put it when Tom Keatinge of RUSI and I did research for a paper on the subject in 2020, ‘if you want to demonstrate that life is not fair, is that a legitimate interest?’

Interestingly, one consideration that is not reflected in the judgment is the role of the public at large in verifying beneficial ownership information by spotting discrepancies, as distinct from merely consuming it. While I would not expect it to reverse the outcome, note, for instance, its acknowledgement in the latest draft guidance on beneficial ownership disclosure published by the Financial Action Task Force (FATF):

Public access to this information can enable civil society, other organisations and individuals to cross check the information, which may in turn help to; ensure that information is accurate, adequate, and up-to-date and to identify potential misuse of legal persons (e.g., in tax evasion, fraud, or corruption schemes. However, public access alone is not a sufficient mechanism to ensure accuracy of information. In contemplating the extent and arrangement of public access, countries should take into account data protection rules and other privacy, security, and confidentiality concerns, and consider limiting what basic and beneficial ownership information is made publicly available or applying a tiered approach to information disclosure, e.g. based on legitimate interest.

In summary, therefore, yesterday’s judgment forces the EU to confront the unresolved dilemma of who exactly, beyond law enforcement agencies and regulated businesses, should have access to beneficial ownership information. According to one school of thought, the answer should be ‘everyone’. That view has now sustained a blow, not least because it can no longer rely on the weight of the EU ascribing to it. What the FATF’s new guidance calls a ‘tiered approach’ is the closest alternative, and the name of the game in the EU may well be to cast it in as expansive terms as possible while respecting the Court’s concerns.


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