How private are the UBO data?

Before 27 March 2022, legal entities must register in the Commercial Register which natural persons are the ultimate beneficial owners. But what about your privacy as a UBO? What measures are in place to protect the UBO data?

UBO register

All legal entities must register their UBOs (Ultimate Beneficial Owners). This means that they have to provide the personal data of natural persons who are the ultimate beneficiaries. From 27 March 2022, this obligation also applies to legal entities established before 27 September 2020. Legal entities established after the latter date must already provide these data when registering in the Commercial Register. There are a few exceptions to the registration obligation, such as listed companies and branches of foreign legal entities.

Are you a UBO? In that case part of your personal data will be disclosed. This includes

• First and last name
• Month and year of birth
• Nationality
• State of residence
• Nature and extent of your economic interest in the legal person

Other UBO data, such as the date of birth and residential address, are only accessible to the competent authorities within the framework of investigations. Authorities with access include the Public Prosecution Service, the Tax Department and the Financial Intelligence Unit. The residential address of directors and entrepreneurs in the Commercial Register will be blocked from 1 January 2022.

Privacy

But what about your privacy as a UBO? After all, through the UBO register privacy sensitive data are disclosed. Anyone can see the nature and extent of your economic interest in a legal entity. I.e. what percentage of shares you own or how many voting rights you have. According to the legislator, this infringement is justified because it contributes to combating money laundering.

Recent developments

Court of Appeal of The Hague: privacy sufficiently protected

For the time being, the Dutch Court is of the opinion that your privacy as a UBO is sufficiently protected. The privacy aspects of the UBO register were reason for the foundation Privacy First to go to court. On 16 November 2021, the Court of Appeal of The Hague rejected the claim of Privacy First.

According to the Court, the Dutch legislator has implemented all optional privacy safeguards from the European directive on which the UBO register is based. So the privacy is protected to the extent possible. For instance, only the personal data of the UBO mentioned above are public. In addition, it is still possible to shield these basic data, for instance if UBOs fear for their safety because of the disclosure of their personal data. In addition, persons requesting UBO data have to pay for them and register. Finally, the UBO register cannot be searched by name of the UBO. Therefore, the Court ruled that it is unlikely that UBOs will suffer damage due to the disclosure of their basic personal data.

House of Representatives: privacy insufficiently protected

Despite this ruling, the continuation of the UBO register in the current from is not yet certain. On 26 October 2021, the House of Representatives adopted by a large majority a motion on the UBO register. In this motion, the House of Representatives requested the cabinet to examine how the protection of the privacy of shareholders could be improved. It is still not clear whether the cabinet will execute this motion. After all, such an examination would further delay the late introduction of the UBO register. And given the opinion of the Court of Appeal of The Hague, the cabinet seems to have little room for further protection of the privacy of the UBO.

In line with European fundamental rights?

Proceedings before the Court of Justice of the European Union offer more perspective for the UBOs. This Court has been asked by a Luxembourg court to rule on the validity of the directive underlying the disclosure of personal data of UBOs. The court asks, among other things, on what basis the prevention of crime is served by the disclosure of the UBO register. It is also the question whether the disclosure of UBO data is not in conflict with the fundamental rights from the EU charter and the ECHR.

Also for UBOs of trusts

Are you a UBO of a trust or a similar legal construction? Then you will also be subject to the European Directive and your UBO data will be recorded in the Commercial Register. Until now, the registration of trusts in the Commercial Register was not mandatory, because they are often unincorporated funds.

Conclusion

Due to the adopted motion in the House of Representatives and the questions posed to the Court of Justice of the European Union, it is not certain yet whether the current form of the UBO register will be the final one. However, this does not change the obligation of legal entities to register their UBOs before 27 March 2022. The same applies to all legal entities that are yet to be set up.

Privacy and corporate law lawyer

Do you have questions about the UBO registration obligation or about exceptions to that obligation? Or do you want to have the structure of your company checked in the light of the privacy legislation? Please contact us: