Financial Crime World

EU Court Invalidates Key Anti-Money Laundering Provision; Consequences for CRBR Register

In a significant ruling, the European Union’s highest court has declared that a key provision of anti-money laundering legislation is invalid. The judgment may have far-reaching consequences for Poland’s Central Register of Beneficial Owners (CRBR) and the way in which access to sensitive information is managed.

Invalidated Provision

The Court of Justice of the European Union (CJEU) found that Article 30, Section 5(1)(c) of the EU’s anti-money laundering directive, which requires universal access to information about the ultimate beneficial owners of corporate entities and other legal entities, interferes with the fundamental right to respect for private life. The provision is inconsistent with the EU’s General Data Protection Regulation (GDPR).

Consequences

The ruling may lead to changes in how the CRBR Register functions, potentially limiting access to information collected within it. Other EU member states have already taken steps to restrict access to similar registers, allowing only those with a justified legal interest to obtain the information.

What’s Next?

The European Union is currently working on adopting the Sixth Anti-Money Laundering Directive (AML6), which aims to strengthen anti-money laundering and counter-terrorism financing measures. The proposed changes include:

  • Central registers of ultimate beneficial owners, which will be made available digitally in an official EU language and English.
  • Enhanced verification procedures for legal persons to identify and verify their ultimate beneficial owners.
  • Sanctions for lack of sufficient data or inaccuracies during the registration process.
  • The ability for entities responsible for central registers to verify information using technology.

The CJEU judgment may also influence the AML6 Directive, with MEPs proposing automatic two-and-a-half-year access to registers for persons with a legitimate interest, such as journalists and higher education institutions. This could include a lower percentage threshold for identifying ultimate beneficial owners, potentially down to 5% in cases where entities are exposed to a higher risk of money laundering or terrorist financing.

What Does This Mean for You?

The changes proposed by the AML6 Directive may impact how you interact with the CRBR Register and other similar registers across the EU. It is essential to stay informed about these developments, as they may have significant implications for your business or personal life.

If you have any questions or concerns about the AML6 Directive, CRBR Register, or anti-money laundering regulations in general, please do not hesitate to contact us. Our expert team is here to provide guidance and support.