Judge: doubts over UBO register are justified

The court has confirmed that there is every reason to doubt the validity of the European money laundering directives that form the basis of the UBO register. On this point, the court follows the highly critical opinion of the European privacy watchdog EDPS (European Data Protection Supervisor). The Dutch judge in summary proceedings ruled that it cannot be ruled out that the highest European court, the Court of Justice of the EU, will come to the conclusion that the public nature of the UBO register is not compatible with the principle of proportionality. This question has already been before the CJEU since it was recently questioned by a Luxembourg court. With this issue already on the plate of the highest European court, the Dutch court sees no need to ask questions about it itself.

Privacy First had also asked for temporary suspension of the UBO register. That went a step too far for the judge. The judge believes that rendering the register inoperative is not possible while the underlying EU directive is still in force. That would put the Dutch state in a position of acting in violation of a European directive. With this claim, Privacy First is getting ahead of the music, according to the court. Privacy First will study the judgment on this point, also with a view to a possible appeal.

Privacy First's lawyer, Otto Volgenant of Boekx Lawyers: "The UBO register will put privacy-sensitive data of millions of people on the street. There are doubts from all sides as to whether it is an effective tool in the fight against money laundering and terrorism. It is shooting a gun at a gnat. The highest European court, the EU Court of Justice, will ultimately rule on this. I expect it to draw a line under the UBO register."

Background

Earlier this year, Privacy First Foundation filed a lawsuit in principle against the State over the new UBO register at the Chamber of Commerce. Under the legislation on which the UBO register is based, all 1.5 million legal entities listed in the Trade Register must disclose all kinds of privacy-sensitive information about their UBOs ("ultimate beneficial owners" or "ultimate stakeholders"). This concerns the personal data of millions of directors, shareholders and senior executives of companies (including family businesses), foundations, associations, social organisations and charities, churches, etc. Privacy First considers this a massive privacy violation that also creates personal security risks. Privacy First has therefore asked the court to declare the UBO register unlawful with immediate effect. Much of the information in the UBO register will be publicly accessible and can be requested by anyone. Privacy First considers this totally disproportionate and in violation of European privacy law. The Court of Justice of the EU will test whether the European regulations on which the UBO register is based violate the fundamental right to privacy.

The judgment of the interim court is here.

Update 15 April 2021

Yesterday, Privacy First filed an emergency appeal against the entire judgment with the Court of Appeal in The Hague. The appeal summons can be found here (pdf). Among other things, Privacy First asks the Court to still refer preliminary questions on the UBO register to the European Court of Justice itself and to render the UBO register inoperative until those questions are answered. Given the high stakes at stake, Privacy First hopes that the Hague Court will hear this case at the earliest possible opportunity.

Update 17 August 2021

The court hearing in Privacy First's appeal (urgent appeal) against the verdict will take place on Monday, September 27, at the Hague Court of Appeal.