Following the Court of Justice of the European Union’s (CJEU) ruling to keep public beneficial ownership registers out of the eyes of the general public, noted law firm Higgs and Johnson said in a review of the ruling that European Union member states and other jurisdictions should look to The Bahamas as a model for an appropriate register of beneficial ownership regime.
The firm said the decision by the European court was a welcomed decision that gave “credence” to the limitations this country puts on access to beneficial ownership information.
“There are currently no plans to make information collected under the provisions of the ROBOA (Register of Beneficial Ownership Act) publicly accessible.
“For now, The Bahamas remains steadfast in its approach to dealing with beneficial ownership information confidentially.
“While EU member states and other jurisdictions now seek to scale back their beneficial ownership regimes in light of the ruling, they may readily look to The Bahamas as the appropriate model.”
The review explained that there has been international efforts to increase the transparency of the financial environment, the prevention of money laundering and terrorist financing, cooperation in international tax matters and automatic exchange of financial account information.
The Higgs and Johnson review authors explained that in order to achieve increases in these areas, there has been the want to interfere with individuals’ right to privacy.
The judgment delivered on November 22 of this year by the Court of Justice of the European Union “determined that EU legislation granting public access to the beneficial owner registers of EU member state companies is no longer valid”.
“Central to the ruling was the 2018 Directive of the European Parliament on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, which was controversially amended to require member states to ensure that, in addition to competent authorities and obliged entities (within the framework of customer due diligence), beneficial owner registers were fully accessible by ‘any member of the general public’,” the review said.
“In the previous version of the directive, member states were only required to ensure full access to ‘any person or organization that can demonstrate a legitimate interest’.
“In each case access was, at a minimum, to include ‘at least the name, the month and year of birth, the nationality and the country of residence of the beneficial owner, as well as the nature and extent of the beneficial interest held’.
“In its reasoning, the CJEU found that public access to information on beneficial ownership was consistent with the established general interest of the directive to prevent money laundering and terrorist financing by increased transparency.
“Notwithstanding this, the CJEU found that making personal data available to third parties is not strictly necessary or proportionate to prevent money laundering and terrorist financing.”
The court found that the access to personal data was an interference in individuals’ right to privacy.
The review explained that The Bahamas’ ROBOA was designed to balance the right to privacy and confidentiality with this jurisdiction’s obligation to cooperate with international partners on keeping the financial sector as free from crime as possible.
