As part of the European Union’s fight against money laundering, a mechanism for public registers of beneficial owners was introduced in 2015. These registers allow everyone to know the identity of the persons who control an entity or actually derive economic benefits from it, thereby ensuring transparency regarding hidden or illicit financial arrangements.
Data access restricted in the name of privacy
On 22 November 2022, the Court of Justice of the European Union, the court responsible for ensuring that Member States’ laws comply with European law, invalidated the public nature of these registers, requiring Member States to restrict access only to persons with a ‘legitimate interest’. According to the court, these registers disproportionately infringe on the beneficiaries’ right to privacy.
As a result, in July 2024, France adopted restrictive access procedures for the registers. Researchers must prove that they are affiliated with a laboratory and have previously conducted research on the subject of financial transparency in order to access the database. Journalists must provide proof of a press card or equivalent. NGOs must explicitly work on financial transparency or otherwise have conducted research on the subject.
Yet, essential in the fight against corruption
Restricting access to beneficial ownership registers amounts to depriving democratic countervailing powers of a fundamental tool. In order to investigate, alert and expose opaque financial arrangements that undermine the public interest, it is necessary to have access to data that identifies all the individuals or structures involved.
Financial arrangements are deliberately designed to be opaque and complex, involving multiple legal structures, intermediaries and jurisdictions, in order to make them particularly difficult to understand and identify. This artificial sophistication serves to conceal the true financial flows and the individuals who control them, thereby complicating the work of authorities, organisations fighting corruption and citizens.
Broad, regulated access to this information is not a threat, but a guarantee: a guarantee that those who truly hold economic power cannot hide behind anonymous structures.
For this reason, Sherpa is today calling on the French National Institute of Industrial Property (1) to repeal the conditions of access and is urging the public authorities to keep the beneficial ownership registers open, in the interests of transparency in economic and public life.
For more information: presse@asso-sherpa.org
