Minister Kaag (Finance) sees no reason to postpone the deadline for the UBO register. Legal entities have been given a good 18 months to register. The term is regulated by law; postponement will require a change in the law, the Minister answers the questions of the Folketing.
With regard to the data to be provided, it is important that legal entities already have this information since July 2020. From that moment on, the obligation arose for legal entities to keep track of the ultimate beneficial owners (UBOs) in their own registers.
Of course, it still takes time to make a statement, but the necessary data should be available, the minister writes. The impact on privacy of the UBO registry will be evaluated one and four years after the deadline of March 27, 2022, respectively.
The European Court of Justice
A court in Luxembourg has referred questions to the European Court of Justice for a preliminary ruling. According to Kaag, AG’s conclusion in this case is largely in line with the Dutch implementation. If the Court’s final judgment leads to new insights, these will, of course, be adopted.
In its conclusion, AG states that a public UBO register is compatible with the General Data Protection Regulation. There are also two points where AG’s conclusion deviates from the current guideline. First, the AG concludes that consultants must be registered by the administrator of the register. AG also believes that the identity of the consultant can be given to UBO in necessary cases. The directive now does not require registration of consultants.
Secondly, the AG concludes that there must always be an opportunity to protect a UBO’s data in exceptional circumstances. In the Directive, this is now only an option for Member States to include in their register.
The points raised by AG are in line with what the Netherlands is already doing to protect privacy. With regard to the first point, the Dutch UBO register already provides an opportunity to keep track of the identity of the consultants. It is also arranged that information on consultations can be provided to UBOs upon request. The latter now does not include the identity data of the consultants, but only the number of consultations, categorized by type of consultant.
If the Court were to take over this point from AG on the registration of consultants and the provision of this data, this would therefore be an extension of existing processes in the Netherlands. Disclosure of identity data about consultants is subject to conditions in AG’s deliberations. It is of great importance whether and how the Court takes up this point before taking a position on it. After all, this is about the disclosure of personal data, which the directive does not currently provide.
Protection of UBOs
With regard to the second point, AG states in its conclusion that in exceptional cases where access to the data would constitute a disproportionate violation of their fundamental rights, the provision of shielding UBOs should not only be a competence but an obligation for Member States. At present, a foreclosure scheme is not made mandatory under the Directive, but is a possibility for a Member State. The Netherlands has made full use of this by allowing the protection of public personal data in the event of minors, inability to act or police protection.
Kaag emphasizes that during the parliamentary debate on the legislation, it was stated that persons can also report to the police in advance if they expect that registration in the register can lead to a threat. The police will then make an assessment of the threat. This policy still applies. Of course, the final judgment of the Court of Appeal will be followed if this should lead to different insights regarding the interpretation of the compulsory auction scheme.
Source: Offer letter answers the Folketing’s questions about the UBO register, no. 2022-0000083402, Ministry of Finance, 21 March 2022
This entry was previously published d Taxence.nl†
In-depth course Implementation UBO register
How can you protect the privacy of the wealthy in a legally and tax-responsible way? You will hear it from three specialists in this in-depth course.