Luxembourg Pledges to Enhance Beneficial Ownership Transparency, Falls Short of Initial Commitments

A Crucial Step in Combating Financial Crimes and Money Laundering

Luxembourg has reiterated its commitment to implementing beneficial ownership transparency measures, a crucial step in combating financial crimes and money laundering. This pledge comes on the heels of the 2023 Summit for Democracy, where it vowed to maintain a beneficial ownership registry or an alternative mechanism.

Inconsistencies Mar Luxembourg’s Efforts

However, experts point out that Luxembourg’s efforts have been marred by inconsistencies. Critics argue that the government has fallen short of its initial commitments. In 2018, as part of the EU’s fifth Anti-Money Laundering Directive, Luxembourg was obligated to establish a central, public register of beneficial ownership.

Limitations on Public Access

Although Luxembourg did launch the Registre de Bénéficiaires Effectifs (RBE) in response, a recent Court of Justice of the European Union ruling has effectively scaled back access to the registry. According to the ruling, member states are no longer required to provide public access to the register and instead must only offer access to those who can demonstrate a legitimate interest.

Concerns Among Transparency Advocates

This move has raised concerns among transparency advocates, who fear that it will limit the effectiveness of beneficial ownership transparency measures. “While Luxembourg’s pledge is welcome news, it is essential that the government follows through on its commitments and ensures that the RBE is a robust tool for combating financial crimes,” said a transparency advocate.

Implementation Details Remain Unclear

The implementation details of Luxembourg’s beneficial ownership transparency reforms remain unclear. Some critics argue that the country’s efforts have been insufficient. The Open Ownership map, which tracks beneficial ownership transparency around the world, lists Luxembourg as having implemented one or more beneficial ownership registers, but notes that data may not be comprehensive for all countries.

A Call to Prioritize Transparency and Accountability

As Luxembourg continues to navigate its commitments to beneficial ownership transparency, experts will be closely watching the country’s progress, urging it to prioritize transparency and accountability in its efforts to combat financial crimes.