At a recent BVI Finance Breakfast Forum, Oliver Cooper, Counsel to the IFC Forum and Policy Lead at Charles Russell Speechlys LLP, provided an overview of the European Court of Justice’s (ECJ) decision on public registers, current international standards and shared possible outcomes.
The ECJ judgment, dated November 22, 2022, decided that open public access to the beneficial owner registers of EU member states’ companies is no longer valid, and further states: “The general public’s access to information on beneficial ownership constitutes a serious interference with the fundamental rights to respect for private life and the protection of personal data…”
This judgment comes after and in response to requirements under the Fifth Anti-Money Laundering Directive (AMLD5) which was introduced on May 30, 2018. AMLD5 established the requirement to make the beneficial owner registers fully accessible to the public. Under the Fourth AMLD, the register was only accessible to members of the public who could show a legitimate interest.
In highlighting current international standards on beneficial ownership registers, Mr. Cooper shared that the FATF Recommendations only require that jurisdictions have a central register of beneficial owners, with no requirement for public access. The FATF is currently working to update guidance on beneficial ownership, and has since begun consultations.
The proposed FATF text, in relation to beneficial ownership (Recommendation 24), states that jurisdictions “may consider facilitating public access to basic and beneficial ownership information”, but taking into consideration privacy, security and confidentiality concerns, and considering a tiered approach.
Presently, the OECD has no requirement for public access. And both the OECD and FATF have resisted requiring public registers.
Mr. Cooper explained that the ECJ’s decision only applies to the EU jurisdiction. While the UK is not bound by the ECJ, he stated, “the UK government is politically strongly committed to public registers.”
That said, he asserted, “The judgment is seismic and final. It should not be underestimated how significant the judgment is and how far the court of justice went…There’s no appeal. There’s no prospect of this judgment being held back.”
As for BVI’s and other UK OTs next steps, Mr. Cooper said it would be beneficial to review the current legislation considering the ECJ’s decision and the “new reality” but questioned whether there exists the political will and openness in the UK to have further dialogue.
View the Breakfast Forum here. For more information and updates on the ECJ decision and other financial services news, go to www.bvifinance.vg.