Belgian implementation of the ruling of the European Court of Justice on public access to UBO register
In a landmark judgment of 22 November 2022, the European Court of Justice drew a line under the public access to the register of Ultimate Beneficial Owners (“UBO”) (see our previous newsflash). With a series of legislative measures that entered into force on 17 February 2023, the Belgian legislator complied with this judgment, and public access to the Belgian UBO register was severely restricted. Natural and legal persons wishing to access the register must now prove a legitimate interest.
The UBO register
The Belgian UBO register was established by the Belgian Anti-Money Laundering Act, transposing the Fourth European Anti-Money Laundering Directive, and is used as a tool to prevent money laundering, terrorist financing and related underlying criminal activities. The UBO Register is a source of information that, under the responsibility of members of the management body of companies and other legal entities, tracks which natural persons ultimately control the entity. Certain personal data of the beneficial owner, such as their name and place of residence, are recorded and registered in this centralized database.
In the past, access to certain data on UBOs was open to the general public. In exceptional cases, the UBO (or its representative) could submit a request to limit the visibility of the registered data. Such a request is however only granted in a very limited number of cases.
The European Court of Justice
The judgment of the European Court of Justice of 22 November 2022 was the first step towards restricting public access to the UBO register. In this judgment, the European Court of Justice declared that access to information on UBOs in all cases and for all members of the public, as provided for in the European Anti-Money Laundering Directive, was invalid.
Following the judgment, the Belgian Federal Public Service Finance published a notice on its website announcing the temporary suspension of public access to information on UBOs. However, until recently, the restrictions on the accessibility of the UBO register were not formally implemented into law.
Amendments to the legislation
On 17 February 2023, both the Law of 8 February 2023 amending the Law of 18 September 2017 on the prevention of money laundering and the financing of terrorism and restricting the use of cash (the "Amending Law") and the Royal Decree of 8 February 2023 amending the Royal Decree of 30 July 2018 on the operating modalities of the UBO register (the "Amending Royal Decree") were published in the Belgian Official Gazette. On the same day, both legislative documents immediately entered into force.
The Amending Law introduces a list of categories of persons and authorities with access to (certain data) from the UBO register, including any natural or legal person who can demonstrate a legitimate interest.
For the interpretation of the term "legitimate interest", reference is made to the amending Royal Decree. The Royal Decree states that the applicant must prove that they carry out an activity related to the fight against money laundering, terrorist financing and related underlying criminal activities. The Amending Royal Decree then specifies which non-cumulative conditions shall be considered a legitimate interest: (i) the applicant has as its purpose or carries out activities related to the fight against money laundering in a sustainable and effective manner, or (ii) the applicant acts in court in connection with its purpose or activities related to the fight against money laundering for the purpose of defending an interest related to such purpose or activities, or (iii) the applicant enters into an economic relationship or carries out transactions with a reporting entity and the applicant is involved in activities related to the fight against money laundering.
The Amending Royal Decree does not provide an illustrative list of natural or legal persons who may be granted access, so a case-by-case approach should be adopted. The Report to the King refers, by way of example, to investigative journalists and NGOs.
For the time being, pending IT developments to adapt the UBO register to the above-mentioned legislative changes, any person seeking access who does not have it by virtue of qualification, because they are not an authority or a subjected entity, may send a reasoned request by email to the administration.
Conclusion
Following the ruling of the European Court of Justice on 22 November 2002, the Belgian legislator has taken action and a number of legislative changes were made that affect public access to the UBO register. In particular, access will be limited to natural and legal persons who can demonstrate a legitimate interest related to the fight against money laundering, terrorist financing and related underlying criminal activities.