The beneficial owner, as a natural person who is the ultimate owner of a legal entity or controls that legal entity, is not at all a novelty neither in our nor in the European legal system. Namely, the term "beneficial owner" was defined for the first time in the Law on Prevention of Money Laundering and Financing of Terrorism from 2014 (Official Journal No. 130/14) and this definition has remained essentially unchanged until this day, although in the meantime two new anti-money laundering laws were adopted. In this direction, the well-known participation criterion of at least 25% of the total stocks or shares, or, the of the voting rights in the legal entity', was established in 2014 . The law from 2014 basically aligned our legislation with EU Directive 2005/60, which is better known as the third anti-money laundering directive ( 3AMLD ). However, an official register of beneficial owners in the form of a register was not foreseen in this law, nor in the directive.
Such a possibility was foreseen only in the Law on Prevention of Money Laundering and Financing of Terrorism from 2018 (Official Journal No. 120/18), and again this was done in order to comply with European legislation, namely with EU Directive 2015/849 ( 4AMLD ). The law from 2018 provided that the register contains data on the legal entity, data on the beneficial owner and data on the ownership of the beneficial owner. Furthermore, this law stated that the data recorded in the register, directly and on the basis of electronic access, is available to the Financial Intelligence Office, the competent state law enforcement authorities, the courts, the supervisory authorities (NBRM, KHV, AKRM, etc.) and the obliged entities (auditors, accountants, notaries, lawyers, operators of games of chance, etc.) In addition, the law from 2018 provided that certain basic data about the beneficial owner, such as name, month and year of birth, citizenship, etc. are publicly available in the form of information and can be obtained for a fee in accordance with the tariff of the register’s administrator. With this provision, our law from 2018 provided for more transparency than the directive requires , as the directive made it a condition for a natural person to demonstrate a legitimate interest in being able to access this information. It was left to state authorities to determine what constitutes a legitimate interest, but that interest had to be related to money laundering, terrorist financing, corruption, tax crimes and fraud. Our law from 2018 did not set such a condition, that is, it provided for a register in which certain basic information is publicly available to all legal and natural persons, without proving any interest.
The register of beneficial owners was established at the beginning of 2021, within the framework of the Central Registry. From the day the register was put into use, the 90-day period began to run for reporting the data on the beneficial owners in the Register, which was obligatory of all commercial companies. You can read more about this in our other article, published here .
Furthermore, in 2022, a new Law on Prevention of Money Laundering and Financing of Terrorism was adopted (Official Journal No. 151/22), which is currently valid in our country. In this law, it is stated that other legal and natural persons (the public) have direct and electronic access to the register, as well as the Financial Intelligence Office, the courts and the obliged entities. However, the public only has access to basic data about the beneficial owner, such as name, month and year of birth, citizenship, etc. This law, again like the previous laws, was adopted in order to comply with the European regulation, namely Directive 2018/843 of the EU (5 AMLD ). Consequently, our current law implements EU Directive 2018/843 (5AMLD).
What is less known is that the opening of the register of beneficial owners to the entire public has been the subject of major debates in the EU, which has also been reflected in the negotiations for drafting the text of Directive 2018/843. Namely, the European Parliament and the European Commission constantly advocated for greater transparency, while the Council of the EU expressed reservations regarding the level of information available to the public. In this regard, the initial proposal for the establishment of a public register of beneficial owners was to be based on the Company Law Directive 2009/101, with the aim of ensuring the highest level of transparency, i.e. using the register of beneficial owners for all kinds of business and other needs . In this way, everyone could use the data from the register of beneficial owners in order to be informed with whom they start cooperation, who is behind the company, where the profit of the company goes and other purposes that were not necessarily directly related to the prevention of money laundering money and financing of terrorism .
After all, the register of beneficial owners is nothing more than a set of data from commercial registers that have been sufficiently processed in order to reach the ultimate natural person. The register of beneficial owners does not provide new information, but only facilitates access to already existing information about the beneficial owner. The beneficial owner can mostly be reached even without the existence of such a register, through a search in the trade (company) registers. However, different countries have different rules about what information is kept in company registers, so this usually requires more research, and sometimes it is indeed impossible to reach the beneficial owner due to the secrecy of the data in certain countries (for example, Panama and other tax heavens). Accordingly, there is a close connection between the regulation of companies and anti-money laundering. You can read the text of the initial proposal of the directive here .
However, at the insistence of the Council of the EU, in the final text of the directive, the public register of beneficial owners is not based on the Company Law Directive , but only on the EU Anti-Money Laundering Directive 2018/843 (5AMLD). All changes in the Company Law Directive related to the register of beneficial owners have been deleted from the final text of 5AMLD.
This outcome of the inter-institutional negotiations regarding the text of the EU Directive 2018/843 had a great impact on the judgment of the Court of Justice of the EU in the case "WM and Sovim SA" (Joined Cases C‑37/20 and C‑601/20). With this ruling, the article of the 5AMLD that opened the register of beneficial owners to the public is annulled . The Court's main rationale for such a decision is that combating money laundering and terrorist financing is as a priority a matter for the public authorities and for entities such as credit or financial institutions which, by reason of their activities, are subject to specific obligations in that regard (paragraph 83 of the judgment). With this judgment, it is confirmed that the data from the register of beneficial owners should only be used for the purposes of preventing money laundering and terrorist financing, and basically only by the authorities that are competent for this work . In addition, according to the regulation on the protection of personal data, the use of data from the register should be reduced to the minimum necessary to achieve the goal - prevention of money laundering, and should not be used for other purposes (paragraph 65 of the judgment). The full text of the verdict is available at the following link .
This judgment affected at least 7 EU member states, to limit access to the registers of beneficial owners, mostly only to those persons who can prove public interest (investigative journalists, non-governmental organizations, etc.)
On the other hand, in the same ruling, the European Court of Justice directly mentions that the data kept in the commercial registers in accordance with the Company Law Directive (2003/58) and the data kept in the registers of beneficial owners in accordance with the Anti-Money Laundering Directive (2018/843), differ both in their respective purposes, that is, the reasons for which they can be used (paragraph 87 of the judgment). It is indisputable that data from commercial (company) registers can be used for many purposes and therefore it is justified that this data is available to the entire public (Case Manni, C‑398/15 before the Court of Justice of the EU), while data from registers of beneficial owners are to be used only for one purpose, which is to prevent money laundering and financing of terrorism, and therefore should be available only to competent authorities and to persons who prove their legitimate interest in this direction.
Probably the situation would have been different, had the register of beneficial owners been based on the Company Law Directive, as proposed in the initial proposal of the European Commission. However, in a situation where this register is based only on the Anti-Money Laundering Directive, the availability of data from this register remains limited.
In the meantime, Directive 2024/1640 (6AMLD) was adopted in the EU, which takes into account the conclusions of the European Court of Justice in the "WM and Sovim SA" case. In this regard, Article 12 of this Directive regulates who should have access to the register of real owners, and what data this register should contain. Namely, any natural or legal person who can prove a legitimate interest in preventing and combating money laundering should have access to certain basic data of the beneficial owner, namely: name, month and year of birth, country of residence, nationality, as well as the nature and scope of the interest. On the other hand, this Directive in Article 12 also establishes a presumption of the existence of a legitimate interest for the following persons : journalists who report on preventing or combating money laundering or terrorist financing; civil society organizations, including non-governmental organizations and the academia, that are connected with the prevention or combating of money laundering or terrorist financing; natural or legal persons likely to enter into a transaction with a legal entity and who wish to prevent any link between such a transaction and money laundering or terrorist financing; the obliged entities; public authorities competent in the field of money laundering or terrorist financing; and others... You can find the entire text of 6AMLD here .
What is clear is that the use of data from the register of beneficial owners is limited solely to the purposes of preventing money laundering or terrorist financing. Data from this register should not be used for other purposes.
Contrary to all this, in our country the data from the register of beneficial owners is still available to the general public, and on top of that, this data is also used for purposes which are not related to the prevention of money laundering, such as evidence in business, commercial, labor and criminal disputes. This is in contradiction with the spirit of the Law on Prevention of Money Laundering and Financing of Terrorism and the directive which it implements. Because of this, we believe that changes are urgently necessary in the practice of the Central Registry, which maintains the register of real owners, and this could be done, if not by legal amendments, then with a by-law of the Ministry of Finance or the Financial Intelligence Office. Until this happens, we will remain in an absurd situation of implementing an outdated practice that has been determined by a competent court to violate basic human rights.
