AML Update: RBO access formally restricted to those with a legitimate interest
By way of reminder, on 22 November 2022 the European Court of Justice announced its finding that the provision of the Fourth Money Laundering Directive (MLD4) (as amended by the Fifth Money Laundering Directive (MLD5)) under which Member States must ensure “any member of the general public” can access information held on the central registers of beneficial ownership of corporates is invalid.
Our earlier insights on that decision are here:
Following that decision, and pending EU and/or Irish legislative response, the Irish Central Register of Beneficial Ownership of Companies and Industrial and Provident Societies (RBO) significantly restricted the ability to search its records, with only extremely limited information being available to members of the public.
Regulations have now been signed (the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) (Amendment) Regulations 2023) which amend the existing 2019 Regulations and give legislative support to the access restrictions imposed by the RBO.
The existing 2019 Regulations allowed any member of the public to inspect the RBO. The new Regulations replace that particular provision of the 2019 Regulations, and now require that any person who wishes to inspect the RBO demonstrate that they have a “legitimate interest for doing so”. Such a person must be able to show that:
- they are engaged in the prevention, detection or investigation of money laundering or terrorist financing (ML/TF) offences,
- their request to inspect the RBO is linked to the above activities, and
- the relevant corporate is connected with persons convicted of an ML/TF offence or holds assets in a high-risk third country.
The RBO’s Registrar will have discretion to refuse such a request to inspect the RBO, and will keep a record of inspection requests and the related Registrar decision.
The provisions of the 2019 Regulations which allow designated persons to inspect the RBO remain unchanged.
At EU level, for the time being it does not appear that MLD4 (as amended by MLD5) will be amended in a similar manner. MLD4 originally contained the “legitimate interest” requirement in respect of access to beneficial ownership information on corporates, but that was changed by MLD5 to allow “any member of the general public” to access that information in light of perceived difficulties in providing a detailed definition of “legitimate interest”. As the EU’s latest AML/CFT package is currently being negotiated in trilogues, it may be that there is little appetite to amend the existing Directives when a replacement framework is imminent and that (as is the case with Ireland) individual Member States will put in place their own fixes. Our latest update on the EU proposals is here AML Update: Moving closer to an EU supervisor and single rulebook.
We will publish further insights as developments occur.