Editorial: The Court of Justice of the European Union and the beginning of the end for corporate transparency?
| DOI | https://doi.org/10.1108/JFC-03-2023-293 |
| Published date | 02 February 2023 |
| Date | 02 February 2023 |
| Pages | 305-308 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial crime |
| Author | Dominic Thomas-James |
Editorial: The Court of Justice
of the European Union and the
beginning of the end for
corporate transparency?
Abstract
This paper considers an important, recent development in the corporate ultimate beneficial
ownership landscape emanating from a decision of the Court of Justice of the European
Union in November 2022. This paper explores the impact of this decision in the context of
fundamental legalprotections and the ongoing debate about public registers.
Introduction
For some time, and particularly since the Panama and Paradise papers, international
discourse about ultimate beneficial ownership (UBO) information has been prominent.
While, traditionally, authorities may have known little more than a name or address of a
company, today, understanding UBO informationhas become firmly part of the AML/CFT
toolkit to disrupt economic crime. The accepted relationship between anonymous entities
and facilitating nefarious activity therein is well known. Indeed, the basic rationale for
knowing UBO information may appear itself difficult to disagree with –and therefore
corporate transparency has proceeded considerably unopposed, with even some of the
world’s more well-knownoffshore financial centre jurisdictions like the CaymanIslands and
Bermuda previously committing to creating publicly accessible registers. In spite of this, at
the international level, we continue to see inconsistency in approach and the question of
access to such information remains controversial and undetermined. Transparency
arguments have long existedupon a “nothing to hide, nothing to fear”premise, and a recent
decision emanating from the Court of Justice of the European Union (CJEU) demonstrates
that privacy is not, yet, forgottenin this fast-moving debate. It certainly re-opens the notion
of whether this information is of “interest”or simply just “interesting”, with the important
distinction this carries.
Ultimate beneficial ownership registers and the Court of Justice of the
European Union
November 2022 saw an interesting twist to the public versus centralregister debate. It was
interesting given that the European Union (EU), in its successive AML Directives, has for
some years been a prominentvoice on public register momentum. On 22 November 2022, the
CJEU handed down judgmentin WM and Sovim SA vLuxembourg Business Registers [1]. In
this case, the court had to consider the validity of the public register provisions of the EU
AML Directive which required member states to make their registers of UBO information
available and accessible to any member of the general public. The CJEU considered the
extent to which this requirementinterfered with fundamental freedoms under the Charter of
Fundaments Rights of the EU, specifically, the rights to respect for private life and the
protection of personal data [2]. In judgment, the Court held that the interference by the
provision is not limited to what is strictly necessary, nor proportionate to the objective
pursued –the objective being the prevention of money laundering and terrorist financing
Editorial
305
Journalof Financial Crime
Vol.30 No. 2, 2023
pp. 305-308
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-03-2023-293
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