Corporate transparency in the EU after the Wm and Sovim SA v. Luxembourg business registers judgment
Corporate transparency in the EU after the Wm and Sovim SA v. Luxembourg business registers judgment

Author(s): Daniel Zigo
Subject(s): National Economy, Socio-Economic Research, Sociology of Law, Court case
Published by: ADJURIS – International Academic Publisher
Keywords: AML; beneficial ownership; corporate transparency; register of ultimate beneficial owners; right to privacy; Sovim case;
Summary/Abstract: For many years, the European Union has been a pioneer of legislation that prevents the abuse of corporate structures to conceal the flow of illegal funds or the financing of criminal activity and terrorism. Several anti-money laundering (AML) directives have also been adopted in recent years, harmonizing the laws of Member States and increasing the resilience of the entire bloc. The transparency of companies' ownership structures in the EU gradually increased, as they first had to collect data on their beneficial owners and later register them in central registers so that this data was available to the relevant authorities. Finally, these registers were made available to the general public. The decision of the Court of Justice of the European Union in the case WM and Sovim SA v. Luxembourg Business Registers brought about a reversal of this situation when the Court annulled the provision of the 4th AML Directive that allowed the general public access to the data on beneficial owners due to the violation of the right to privacy and protection of personal data. With this decision, the Court also set criteria for the publication of data on private entities by states. The article deals with the Court's decision, its reasoning, and the Court's considerations concerning the method of publishing beneficial ownership data. The author analyzes the direction in which corporate transparency in the EU will most likely develop in the near future based on the judgment, the Opinion of the Advocate General and current developments in the EU institutions.

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