EU Court of Justice says no to public register mandate

The European Union (EU) Court of Justice has struck down an EU mandate for there to be public registers of beneficial ownership of all companies, according to an article posted by Bermuda’s The Royal Gazette.

Attorney General Ryan Pinder told Guardian Business yesterday that the ruling is a “win” for jurisdictions like The Bahamas because its “recognizes the importance of protections when it comes to privacy and data protection, which are protected rights”.

The Bahamas’ registry of beneficial owners is not public and Pinder said it will remain that way.

“We have a non-public beneficial ownership registry that is accessible by prescribed enforcement agencies,” he said.

“We have always maintained that given the privacy and data protection concerns, especially with clients from jurisdictions that might use the beneficial ownership information for matters unrelated to taxation and financial regulation, that the beneficial ownership registries should be maintained as a non-public registry.”

The Royal Gazette article explained that this position taken by the courts has been the position Bermuda has held steadfast to as well.

“The justices ruled that the provision whereby the information on the beneficial ownership of companies incorporated within the territory of member states is accessible in all cases to any member of the general public, is invalid,” the article said.

“The court has ruled that registers containing the personal details of the owners of a company being accessible to the general public is an infringement of the fundamental rights of privacy and personal data protection.

“Bermuda has long resisted efforts to make beneficial ownership registers public, arguing that authorities which can show reasonable cause to identify beneficial owners have always been able to do so.

“However, it said in 2020 it would make ownership registers public in 2023, provided this was a global standard by then. The EU ruling throws that commitment in doubt.”

Former Attorney General Carl Bethel explained in August of 2021 that The Bahamas has yet to join the rest of the world in establishing a public registry of beneficial ownership.

“We established the beneficial ownership secure search system to address global concerns that there must be greater transparency in access to the information as to who owns corporate and other vehicles, which are active in the global financial system. This is a global initiative, and every country is being “encouraged” to implement systems designed to prevent the hiding of beneficial ownership information,” he said.

“We do not have a public registry of beneficial ownership, unlike Great Britain and other European countries. Our Register of Beneficial Ownership (ROBO) Act was modeled on the industry standards set throughout the world. It provides for a secure system of registration of beneficial ownership information for all entities specified in the law, which registry is only accessible for law enforcement and regulatory purposes. By Section 13(1) of the ROBO, very stringent “confidentiality” terms are imposed by the law.

“Further, in section 13(2) the law states that all information maintained on each database is confidential and is only accessible by: (a) a designated person through the secure search system and (b) the registered agent to whom the database relates.

“Section 12(6) of the act lists the authorities, which may designate an officer to request and receive a search report of the BOSSS from a designated (search) person, they are: the Office of the Attorney General, the FIU [Financial Intelligence Unit], the Central Bank, the Compliance Commission, the Securities Commission, and the Insurance Commission.”

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Chester Robards

Chester Robards rejoined The Nassau Guardian in November 2017 as a senior business reporter. He has covered myriad topics and events for The Nassau Guardian. Education: Florida International University, BS in Journalism

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