Court of Justice delivers scathing verdict on the UBO register

On 22 November 2022, the European Court of Justice ruled that public accessibility of the UBO register violates the fundamental right to privacy and the protection of personal data. General access to “the general public” goes beyond what is necessary and is disproportionate. For entrepreneurs, this means that the obligation to provide UBO data remains, but the broad public accessibility of that data has been affected. Below, you can read exactly what the ruling entails and what the consequences are for the UBO register in the Netherlands.

What is the UBO register?

The UBO register records certain personal data of the ultimate beneficial owners (UBOs ) of companies and other legal entities and structures. In short, a UBO is the natural person who is the ultimate owner of or has ultimate control over an organization. This registration obligation is one of the measures under the Fourth EU Anti-Money Laundering Directive and is intended to combat money laundering and terrorist financing.

As of September 27, 2020, the regular UBO register in the Netherlands entered into force; the Chamber of Commerce manages the registration. As of November 1, 2022, there is also a Dutch UBO register for trusts and similar legal structures.

What information is contained in the UBO register?

The register consists of a public section and a protected section.

• Accessible to the public (was): first name, surname, month of birth, year of birth, nationality, state of residence and the nature and extent of the UBO's interest.
• Only for authorized authorities: more sensitive data such as the BSN, the full date of birth, the residential address, a copy of a valid identity document, and an email address.

Under certain conditions, information may be shielded from the public, for example if the UBO is a minor or legally incapacitated, or when someone is under police protection.

What did the Court of Justice rule?

The Court of Justice had to rule in a Luxembourg case on whether the public accessibility of the UBO register was lawful. A Luxembourg company and an ultimate beneficial owner of that company had lodged an appeal with the Luxembourg court of first instance seeking to restrict access to their personal information. The Tribunal d'arrondissement de Luxembourg subsequently referred preliminary questions to the Court of Justice.

In its judgment, the Court ruled that public access to UBO information constitutes a serious interference with the right to protection of personal data and the right to respect for private life. Such interference can only be justified if it serves an objective of general interest and the measure is both necessary and proportionate.

According to the Court, while there is indeed an important societal objective — combating money laundering and terrorist financing — general public access goes far beyond what is necessary and is not proportionate to that objective.

Consequences for the UBO register in the Netherlands

The ruling also has far-reaching consequences for the Netherlands. The broad public accessibility of part of the UBO information is no longer tenable following the judgment. Important to remember:

• The registration obligation itself remains in place. Providing UBO information is not the problem; making it publicly accessible is.
• Following the ruling, the minister decided that the Chamber of Commerce would temporarily no longer provide information from the register to the general public.
• The legislature must amend the rules so that access is restricted to parties with a legitimate interest (such as competent authorities and certain institutions). TODO_VERIFY: the exact status of the access regulations and any new legislation changes — check the current situation with the Chamber of Commerce and the Ministry of Finance before publication.

Anyone wishing to have their data shielded could submit a request for shielding referring to the judgment. In principle, persons subject to the registration requirement can do so immediately upon their registration.

What does this mean for you as an entrepreneur?

The practical approach for SMEs:

1. Continue to comply with the registration obligation. The ruling does not abolish the obligation to register UBOs. Ensure that your registration is accurate and complete.
2. Please note that public access has been reversed. Your “public” UBO data is no longer freely available to everyone.
3. Are you unsure about who qualifies as a UBO or how to register correctly? Have your structure legally reviewed, especially in the case of multiple companies, holding companies, or foreign shareholders.

Frequently asked questions about the UBO register

Do I still need to register my UBOs?

Yes. The registration requirement has not been abolished by the ruling. Only broad public access to a portion of the data has been affected.

Who can still view my UBO details?

Competent authorities retain access. For other parties, access is limited to those with a legitimate interest. TODO_VERIFY: the precise definition of “legitimate interest” and the access procedure are subject to change — check the current regulations.

Can I have my data shielded?

Protection is possible under conditions, for example in cases of minority, legal incapacity, or police protection. In addition, following the ruling, UBOs could request the protection of publicly accessible data.

What happens if I don't register my UBOs?

Failure to comply (correctly) with the registration requirement can lead to enforcement and sanctions. Have your obligations checked if you have any doubts.

Need help with UBO registration or your business structure?

The rules surrounding the UBO register are constantly evolving. Do you want assurance that your registration is correct, or do you have questions about who qualifies as a UBO within your structure and what the privacy implications are? The legal experts at MKB Juristen help entrepreneurs, from sole proprietorships to large corporations, with clear and practical answers.

Read more about our expertise in corporate law and privacy and data protection, or schedule an intake interview directly. You can read more background information in our blog about mandatory UBO registration.