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Privacy First asks House of Representatives not to agree to public UBO register
In a letter to finance committee Privacy First Foundation has asked the House of Representatives not to agree with the government's intention to make the register of beneficial owners (UBOs), the UBO register, de facto public. The reason for writing the letter is that the bill amending access to the UBO register will soon be debated in this committee.
Furthermore, Privacy First took the opportunity to alert the Finance Committee that the new European rules on UBO and UBO register wrongly equate the non-profit foundation with the Anglo-Saxon trust. This is disproportionate and has unacceptable consequences.
Access UBO register
In the letter, Privacy First points out that the UBO register is a source of concern for people involved in legal entities and other entities listed in the Trade Register. This is also because the term 'UBO' is defined very broadly, which means that many people with no economic interest in a legal person or entity end up in that register.
The government has not yet commented in the bill on exactly which private parties will have access to the UBO register on the basis of 'legitimate interest'. Privacy First fears such low-threshold and large-scale access to the UBO register as to make it de facto public. This after the European Court of Justice correctly (in a Privacy First-backed case) several years ago had determined that a public, widely accessible UBO register violates European privacy law.
The bill was introduced on 25 June last, shortly after new European anti-money laundering legislation was published in the European Official Journal (19 June last). This means that it can be assumed that through this bill the new access rules as contained in the European Anti-Money Laundering Directive announced on 19 June [*] will be implemented.
The directive states that those who have a "legitimate interest" will be granted access to all data in the UBO register for three years. Those who are granted access on that basis are not tested for integrity, and criminalisation of abuse and other safeguards are missing from the directive.
The objections to the directive also apply to the bill tabled by the government. Privacy First hopes that the Lower House will pay attention to respecting the fundamental rights of UBOs. To this end, Privacy First has formulated a large number of questions on the bill and the new access rules of the new European Anti-Money Laundering Directive.
All foundations become 'high-risk entities'
The new European anti-money laundering legislation provides that all foundations are deemed comparable to the express trust [**]. As a result, a very large number of individuals involved in foundations must be registered in the UBO register, including founders, directors, supervisors, beneficiaries and senior executives. A rationale for the need to designate all foundations as high-risk entities (like the Anglo-Saxon trusts apparently are) is missing.
Seriously, senior executives, i.e. employees with executive functions who are responsible for, and accountable to the board for, the day-to-day management of the entity, are also bombarded as 'UBO'.
Privacy First has also formulated a large number of questions on this topic.
Fundamental rights must also be respected in the fight against crime
Privacy First understands the desire of European and Dutch legislators to fight crime. However, this does not mean that fundamental rights of citizens active in good causes should be arbitrarily undermined.
Read HERE Privacy First's entire letter (with draft Chamber questions in attachments) to the House of Representatives (pdf).
[*] Directive (EU) 2024/1640 dated 31 May 2024.
[**] Article 57(1) of Regulation (EU) 2024/1624 dated 31 May 2024.
This article was also published at PONT Data & Privacy, see Privacy First asks House of Representatives not to agree to public UBO register - PONT Data&Privacy (privacy-web.co.uk).
