On 22 November 2022, the European Court of Justice (ECJ) judged that the European UBO registers should not be publicly accessible. High-level summarizing, access to UBO registers should be granted only to institutions and persons having a legitimate interest.
This judgement has caused that UBO registers accross the EU are not accessible since 22 November 2022, pending a decision to be made by the respective EU member states on which institutions and persons would have a 'legitimate interest'.
It is noted that the judgement and the closure of access to the UBO registers did not cause the obligation to register UBOs to be halted too. That obligation continued to be in force.
Now, on 20 January 2023, the Dutch Minster of Finance issued an update on the Dutch UBO register. She explained that the EU Directive imposing the UBO register (being: Directive (EU) 2018/843 or so-called “AMLD 5”) in principle contains minimum requirements. EU member states may impose more strict requirements, which could enable a public access to the UBO register. However, the Dutch government has now concluded that there are not sufficient arguments to implement AMLD 5 more strict.
Therefore, the public access to the Dutch UBO register, as currently laid down in Dutch law, will have to be amended. The Minister of Finance will therefore present a draft bill of law soon, in order to define who will be considered to have a legitimate interest for gaining access.
In practice, this will mean the following for Dutch practice:
- access for authorized authorities and financial intelligence units (e.g. Dutch Tax Authorities) will remain unlimited. The UBO register shall re-install access to these authorities.
- access for institutions that have a mandatory legal obligation to verify UBOs in relation to their KYC procedures, will remain unlimited (e.g. banks and civil law notaries). The UBO register will have to re-install access here too. But this re-installation will cause some more time for ICT reasonings, since some institutions have their access technically outsourced via third-parties, who do not necessarily have a legitimate interest. Related to that, the institutions that fall within this second scope, will temporarily be exempted from their legal duty to report any incorrect findings in the UBO register, until access has been fully re-installed. However, these institutions will remain obliged to identify the UBOs of their clients. In addition, they will be held to verify with their clients if these have made the (obligatory) UBO registrations with the UBO register.
- access for the public will be denied. The upcoming bill of law will limit access to those who have a legitimate interest. The Minister of Finance mentions, as examples, insurance companies in relation to their KYC procedures or journalists reporting on money laundering.
The obligation for companies to register their UBOs has therefore not been lifted nor suspended. However, due to the uncertainty that the judgement of the ECJ has caused, the Minister of Finance grants an additional grace period up to 1 February 2023 for companies to register their UBOs, if not done so already. Until that date, no sanctions will be imposed in case companies are not compliant. However, the Dutch authorities will pick up again as from now on making sample checks if companies have registered their UBOs. It therefore remains recommended to register the UBOs.
