No more snooping around

In 2015, in a world that was calling for more and more transparency to combat money-
laundering and terrorist financing, the European Union, in its Directive 2015/849, first introduced the concept of a public register intended to house information on ultimate beneficiaries of companies (“UBOs”), accessible by any person who could show to have a “legitimate interest” in that information. 

In the wake of various scandals uncovered by international investigative fora about the wide-spread use of international corporate structures to avoid or even evade taxation all together (Football Leaks, Panama Papers), Directive 2018/843 amended Directive 2015/849, introducing the concept of unrestricted access by any member of the general public to the information on beneficial ownership as registered in the local national beneficial ownership registries.

Ever since the introduction of these national beneficial ownership registries, any person
“controlling” an entity registered within the territory of the European Union, must be registered in these so-called UBO-registers and disclose personal information.
Generally, for the sake of registration, any person owning more than a 25% interest, whether directly or indirectly, is deemed to have control over an entity and must be registered as a UBO.

Special rules apply to determine the control exercised by persons that hold a stake in an entity via a trust or other arrangements.
Information to be registered regarding a UBO concerns sensitive personal information (such as family name, first names, date of birth, place of birth, nationality, country of residence, complete residential or professional address and personal identification numbers) and information on the actual interest and the nature of the stake held in an entity.

While Luxembourg is usually somewhat “wait-and-see” when it comes to the implementation of European Directives, it moved forward rather quickly with the constitution of its Register of Economic Beneficiaries (“RBE”) and the implementation of the “access for all” concept in respect of its beneficial ownership. In Luxembourg, apart from personal identification numbers, all other personal information, the stake and nature of the stake held by a person was easily accessible, once the name or registration number of an entity
was entered into the search screens of the web-site of the RBE.

Exceptions to the “access for all” principle are possible in Luxembourg under the current law. A registered entity or a beneficial owner can request that access to the information that must be disclosed to the RBE will remain restricted to national authorities, credit institutions, financial institutions, bailiffs, notaries, attorneys and tax advisors that need access to UBO information when acting in the performance of their professional duties. Such exception, however, is only granted in the event that access to that information would expose the UBO to a disproportionate risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation, or where the UBO is a minor or otherwise legally uncapable.

The unrestricted access to UBO information in Luxembourg is rather unique in the European
Union, where some countries have not even begun to accomplish a UBO register (Italy, Spain), struggle with the implementation (Netherlands) and others have been faced with national court cases (France) regarding the conflicting rules of the European Union regarding the protection of privacy on the one hand and the rules laid down in article Directive 2018/843, granting access for any member of the general public to the information on beneficial ownership.