Investigative journalists, nongovernmental organizations, or NGOs, and other parties that demonstrate a “legitimate interest” will regain broad access to all 27 of the EU’s national registers of beneficial ownership details under requirements set to take effect in mid-2026.
EU lawmakers and the Council of the EU, which represents the bloc’s 27 national governments, reached an agreement last month on the final text of a new anti-money laundering directive, 6AMLD, with provisions to strengthen standards governing national ownership databases and financial intelligence units.
The directive will now give academics, the press and other legitimately interested parties comprehensive, streamlined access to the names and other details of legal-entity owners, after a ruling by the EU’s top court two years ago prompted several of the bloc’s nations to withhold such information from them.
Further recognizing the role such parties play in exposing illicit finance, lawmakers and nations also agreed to reopen the EU’s 27 national beneficial ownership registers to them a year earlier than previously envisioned, sources told ACAMS moneylaundering.com.
Specifically, whereas nations must transpose other provisions of 6AMLD into laws and regulations within three years of the directive’s official publication, currently slated for May, they must now reopen their registers to journalists and NGOs within two years.
“Empowering UBO [ultimate beneficial owner] registers and allowing quick and easy access to them for people with legitimate interest is a critical aspect of combating financial crimes,” Dutch MEP Paul Tang told moneylaundering.com in an email.
News outlets and civil society groups gained access to EU ownership databases under a previous AML directive seven years ago, or at least did on paper. In practice, they frequently met with resistance when trying to obtain names and other details of the true owners of legal entities when trying to “follow the money” during the course of their investigations.
Cyprus and Germany, for example, previously required journalists and other parties with a “legitimate interest” to re-apply for access for every query, and regularly neglected to respond to requests within a reasonable time.
After the Court of Justice of the EU struck down broad access in November 2022, nations took widely varying approaches towards guarding ownership details. Cyprus, Malta and the Netherlands have consistently denied public access to their databases since the ruling—even to investigative reporters and NGOs—while France, Latvia and others kept theirs open.
Germany still reviews requests for access on a case-by-case basis, but may take anywhere from 24 hours to several weeks to respond to them.
6AMLD aims to iron out those variances by requiring national governments to respond to applications for access within 12 working days, a draft of the directive obtained by moneylaundering.com shows.
The directive will further modify the status quo so that securing access to one EU nation’s registry means securing access to all 26 other nations’ registries for the next three years, after which the applicant can reapply for entry and expect a response within seven days.
National governments will also have to establish “harmonized search criteria” under the directive so that journalists and other legitimately interested parties can search their registries by the names of legal entities, by national corporate registration numbers, by the first names and surnames of individuals, or by the month and year of their birth.
They must grant those same parties rights to review “historical data” on legal entities, including those that ceased operating within the five years preceding the request, as well as the previous owners and controllers of still-active companies.
Maira Martini, head of policy at Transparency International in Berlin, said 6AMLD will close “many of the loopholes” and weaknesses of the EU’s two previous AML directives, 4AMLD and 5AMLD.
“Access to historical data is also good—that’s really an advance,” Martini said. “But a lot still depends on [effective] implementation.”
Other parties for which 6AMLD aims to guarantee access, albeit “on a case-by-case basis,” include public procurement firms, companies and individuals entering into business with an EU legal entity, and third-party providers of know-your-customer information in so far as their queries pertain to AML compliance.
U.S. banks and other AML-regulated companies outside the EU can also apply to search for records while vetting their corporate customers for AML purposes.
Separately, within three years of the directive entering into force, national authorities must have “mechanisms” in place to verify that the data they hold “is adequate, accurate and up to date,” and new powers to compel information to that effect from limited partnerships, limited liability companies and other entities in their jurisdictions.
The extent and frequency of that verification must depend on the financial crime-related risks each entity presents, according to the directive.
Nations must further give agencies tasked with running their respective databases of ownership details power to penalize, or request that another agency penalize, entities that do not comply with their disclosure requirements.
The registries must also screen the information they hold for the presence of EU-blacklisted individuals and other parties subject to sanctions, according to the directive, and determine whether any subsequent change in ownership or control of a legal entity suggests an attempt to evade the bloc’s financial embargos.
Contact Koos Couvée at firstname.lastname@example.org
|Anti-money laundering , Know Your Customer
|February 8, 2024