Reinier advises national and international companies
reinier.russell@russell.nl +31 20 301 55 55The UBO register is no longer accessible to all. What does this mean for the privacy of UBOs? What are the consequences for companies that are required to investigate who the UBOs of their business partners are?
The Dutch Chamber of Commerce has put on hold the provision of information from the UBO register due to a recent ruling of the Court of Justice of the European Union. It ruled that the accessibility of the UBO register must be limited, so that the privacy of UBOs (Ultimate Beneficial Owners) can be better ensured. This restriction means that a client check will become more difficult now that the information from the UBO can no longer simply be obtained through the UBO register.
Since 27 March 2022, legal entities are required to register their UBOs with the so-called UBO register. The purpose of the register is to prevent money laundering and terrorist financing through greater transparency.
Parts of the UBO register were accessible to all, which resulted in certain sensitive personal data of the UBO being disclosed to everyone, such as the extent of the economic interest in a company. The question then arose about the privacy of the UBO. We already announced in a blog about this topic that the Court of Justice of the European Union would rule on the question whether the disclosure of personal data of UBOs would be in conflict with fundamental rights, such as the respect of privacy and the protection of personal data.
On Tuesday, 22 November 2022, the Court of Justice of the European Union ruled that the accessibility of the UBO register is indeed in conflict with the fundamental rights laid down in the European Charter, as the accessibility of the UBO register ‘is not restricted to what is strictly necessary and disproportionate to the objective pursued’.
The ruling does not result in the UBOs’ registration obligation to disappear. The registration obligation continues to apply. If your company has not registered the UBO yet, you will need to do so as soon as possible. What will be changed as a result of this ruling, however, is the disclosure of data. It is certain that there are currently insufficient safeguards to protect the personal data of UBOs from the risk of misuse.
The Minister of Finance has therefore requested the Chamber of Commerce to suspend the provision of information from the UBO register. However, the public prosecutor’s office, tax authorities and the Financial Intelligence Unit do have access to the register. It is still unclear when and in what way the accessibility of the register will be brought more in line with the right to privacy.
Adjusting the accessibility of the UBO register will likely entail that it will be difficult or impossible to find out who the UBO of a company is. Only individuals or organizations with a legitimate interest will be allowed access to the register. However, it is still unclear who this will include and when there is a legitimate interest.
Following the ruling of the Court of Justice of the European Union, the accessibility of the UBO register will have to be adjusted so that it adequately safeguards the right to privacy. However, the ruling does not affect the registration duty for UBOs. Currently, it is still unclear which individuals and organizations, apart from the public prosecutor’s office, the tax authorities and the Financial Intelligence Unit, will get access to the register. Until then, for mandatory customer due diligence, other ways will have to be explored to ascertain the identity of a UBO.
Do you have any questions about the protection of your privacy or do you need advice about registering your UBO? Are you looking for legal assistance in a dispute in the area of privacy or corporate law? Our specialists will be happy to help you! Please contact us:
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