Introduction
As you will likely know, the UK has a public register of beneficial ownership of companies and overseas entities that hold interests in UK land.
This means that anyone with a bit too much time on their hands can search the registers to find out who the ultimate owners of these entities are.
Recent decision of the CJEU
However, the legality of public access to beneficial ownership registers has been challenged in the European Court of Justice (CJEU).
In a judgment in November 2022, the CJEU ruled that general public access to registers of beneficial ownership of companies is invalid as it is a serious interference with the fundamental rights to privacy and protection of personal data.
The UK Government’s response to the decision
The UK government has said that it will continue to permit unrestricted public access to the PSC register and the ROE.
However, it is possible that the UK could be forced to change its position if the CJEU’s judgment is upheld by the European Court of Human Rights (ECHR).
The debate
The debate over public access to beneficial ownership registers is complex.
On the one hand, there is a clear public interest in transparency in corporate ownership structures. This is essential for the fight against money laundering and tax evasion.
On the other hand, there are also legitimate concerns about the potential for public access to beneficial ownership information to be used for criminal purposes, such as fraud and harassment.
The UK government has said that it is committed to striking a balance between these competing interests. However, it remains to be seen whether the government will be able to do so in a way that is acceptable to the ECHR.
In the meantime, businesses and individuals who are concerned about the potential risks of public access to beneficial ownership information should take steps to mitigate these risks.
What are the implications of the CJEU judgment?
The CJEU’s judgment has a number of implications for the UK.
First, it means that the UK government may be forced to change its position on public access to beneficial ownership registers.
Second, it could make it more difficult for the UK to cooperate with other countries on the fight against money laundering and tax evasion.
Third, it could deter businesses from investing in the UK.
What are the next steps?
The UK government is currently reviewing the implications of the CJEU judgment.
It is possible that the government will introduce new legislation to restrict public access to beneficial ownership registers.
However, it is also possible that the government will decide to challenge the CJEU judgment in the ECHR.
The outcome of the UK government’s review will have a significant impact on the fight against money laundering and tax evasion in the UK. It will also have implications for businesses and individuals who are concerned about the potential risks of public access to beneficial ownership information.
If you have any questions about public access to beneficial ownership registers, then please get in touch.