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Full Disclosure to the General Public: A Necessary Step in Combating Money Laundering

In recent years, the European Court of Justice (CJEU) has issued several judgments that have significant implications for beneficial ownership disclosure. These decisions have sparked intense debate among legal experts, policymakers, and citizens about the balance between privacy and transparency.

A Populist Tool

Prince Michael von und zu Liechtenstein, a renowned expert in trusts and trustees, argues that public registers can be an effective tool to control citizens. However, some critics argue that such registers may infringe upon individuals’ right to privacy. The debate highlights the need for a nuanced approach that balances individual rights with the need for transparency.

Beneficial Ownership Disclosure: A Cure for Money Laundering?

Radon and Achuthan’s research suggests that beneficial ownership disclosure can be an effective way to combat money laundering. The authors argue that such disclosures can help identify shell companies and prevent illegal activities. However, some experts have raised concerns about the potential impact on individual privacy.

ECJ Decision Impairs Global Fight Against Money Laundering?

Siems’ analysis of the ECJ’s decision in WM and Sovim SA v. Luxembourg Business Registers (Joined Cases C-37/20 and C-601/20) suggests that it may have impaired the global fight against money laundering. The author argues that the decision undermines the effectiveness of beneficial ownership disclosure.

Charter of Fundamental Rights

The Charter of Fundamental Rights of the European Union recognizes the right to privacy and data protection. Article 8 of the charter states that “everyone has the right to respect for his or her private and family life, home and communications.”

CJEU Judgments

In recent years, the CJEU has issued several judgments related to beneficial ownership disclosure. These include:

  • Volker und Markus Schecke and Eifert (Joined Cases C-92/09 and C-93/09)
  • Commission v Hungary (Transparency of Associations) (Case C-78/18)
  • Commissioner of An Garda Síochána (Case C-140/20)
  • Ligue des droits humains (Case C-817/19)
  • Vyriausioji tarnybinės įstaigos (Case C-601/20)
  • Joined cases C 37/20 and C 601/20

FATF Recommendations

The Financial Action Task Force (FATF) has issued recommendations on beneficial ownership disclosure. The FATF recommends that countries establish public registers of beneficial ownership information, which should be accessible to the general public.

Global Efforts

Several countries have made progress in implementing beneficial ownership disclosure requirements. For example:

  • France’s Constitutional Court has recognized the right to access beneficial ownership information.
  • The Tax Justice Network has welcomed these efforts, stating that “full transparency is essential for preventing corruption and money laundering.”

Open Ownership Map

The Open Ownership map provides a comprehensive overview of countries’ progress on beneficial ownership disclosure. The map highlights the need for continued efforts to improve transparency and combat money laundering.

Conclusion

Full disclosure to the general public is a necessary step in combating money laundering. While there are valid concerns about individual privacy, the benefits of transparency outweigh the risks. As the CJEU’s judgments demonstrate, a nuanced approach that balances individual rights with the need for transparency is essential.