Gibraltar’s Beneficial Ownership Tracking Rules Dealt Blow by EU Court

European Court of Justice Ruling Sparks Concerns Over Transparency

The European Court of Justice has delivered a significant blow to Gibraltar’s rules on beneficial ownership transparency, ruling that making information publicly accessible constitutes a serious interference with individuals’ right to private life and protection of personal data.

Judgment Highlights Key Points:

• The 5th Anti-Money Laundering Directive requires Member States to ensure access to information on corporate and legal entities’ beneficial owners is restricted to those who demonstrate a legitimate interest.
• Gibraltar’s current rules, introduced in 2017, allow public access to this information.
• The court found that the interference entailed by making information publicly accessible was “considerably more serious” than the previous regime.

Implications for Gibraltar and Industry

Gibraltar has continually sought to promote financial transparency. However, it may now have to reconsider its approach in light of this judgment. Industry observers will be watching closely to see whether Gibraltar reverts back to the previous wording requiring individuals to demonstrate a legitimate interest in accessing UBO register information.

Possible Outcomes:

• Reversion to previous rules requiring a legitimate interest
• Adoption of new regulations balancing transparency and private life protection
• Establishment of a new precedent for other jurisdictions

The implications of this ruling are far-reaching, and it remains to be seen how Gibraltar will respond.