Italy: Still delays in the implementation of the Register of Beneficial Owners

The Court of Justice of the European Union declared, with its judgment in the joined cases C-37/20 (Luxembourg Business Registers) and C-601/20 (Sovim) on 22 November 2022, the invalidity of Article 30 (5) of the IV. Anti-Money Laundering Directive^[1], the provision which regulates that information on the beneficial ownership of companies incorporated within the territory of the Member States is accessible in all cases to any member of the general public.
 
In the aforementioned decision, the ECJ pointed out that this provision – the scope of which was, inter alia, broadened when the Fifth Anti-Money Laundering Directive^[2] came into force – infringes the fundamental rights enshrined in Articles 7 and 8 of the Charter of Fundamental Rights of the European Union (the “Charter”) which outline the respect for private life and protection of personal data.
 
According to the Court, allowing a potentially unlimited number of persons to have access to personal data and about the financial situation of the beneficial owners of a company or other entity could expose them to considerable risks, even of personal nature, considering that, once published, the information could be freely consulted, stored and, above all, disseminated without the realistic possibility of identifying the perpetrator of such abuse. According to the ECJ the general interest of anti-money laundering and the prevention of terrorism financing, although of primary importance^[3], was in any case not considered capable of justifying the serious infringements of the fundamental rights enshrined in Articles 7 and 8 of the Charter.
 
As a result, the Court of Justice's ruling resulted in the temporary suspension of the Registers of Beneficial Owners already operational in several Member States (such as Austria, Belgium, Cyprus, France, Germany, Ireland, Luxembourg, Malta and the Netherlands), some of which were subsequently reactivated again.
 
In France, for example, the access to the Register is back on after a three-week deactivation period. Initially the access was only granted to the press and civil society organizations demonstrating a legitimate interest in accessing the Register, and ultimately the public was granted access again. Indeed, France considers the public's interest in continuing to access the Register to be legitimate.
 
On the other hand, Germany, attempting to comply with the ECJ’s ruling, has opted to only grant access to the Register to the public if the applicant demonstrates a legitimate interest.

 
 
In fact, in the months preceding the publication of the Court of Justice's ruling, Italy had made considerable progress in implementing its own Register. On 9 June 2022, the Interministerial Decree No. 55 of 11 March 2022 (the “Interministerial Decree”) entered into force, laying down “provisions on communication, access and con­sul­tation of data and information relating to the beneficial ownership of undertakings having legal perso­nality, private legal persons, trusts producing relevant legal effects for tax purposes and trust-like legal institutions”, and by the end of the year further decrees were expected to finally make the Register operational.
 
The Interministerial Decree, however granted the public access to the Register upon request and without limitation, except for cases, in which the subject concerned indicated exceptional circumstances in order to prevent disclosure of beneficial ownership information. Thus, the judgement of the ECJ inevitably brought a halt to the regulatory process of activating the Register of Beneficial Owners in Italy.
 
In the meantime, the European Commission has sent a letter of formal notice to Italy (INFR(2022)2150) due to the incorrect application of the current Anti-Money Laundering Directive for failure to activate the Register of Beneficial Owners^[4].
  
Thus, it will be necessary to amend the aforementioned Interministerial Decree and issue the final implemen­ting decrees as soon as possible in order to make the Register of Beneficial Owners operational and, hopefully, place the limitations on its access as requested by the ECJ.