In summary proceedings against the Dutch State, privacy organization Privacy First is challenging the UBO register introduced last year. Everyone can find out who the ‘ultimate stakeholders’ of a company or other type of organization are. This concerns, for example, shareholders of a private company with an interest of more than 25 percent, but also directors of foundations or ecclesiastical organizations are included. Privacy First wants the register to be inoperative.
The register is intended to combat financial and economic crime such as money laundering, tax evasion, fraud and terrorist financing. But because the register can be viewed by everyone for a fee of 2.50 euros at a time, there have been concerns about privacy from the first plans. The register contains at least the name, month of birth, year and nationality of UBOs (Ultimate Artificial Owners).
“The privacy violation resulting from the UBO register and the public accessibility of sensitive data is disproportionate,” said Privacy First. All more than 1.5 million legal entities registered in the Trade Register must disclose information about their UBOs. They often have several ‘ultimate stakeholders’.
“My estimate is that between 1 and 2 million people are registered as UBOs,” says Otto Volgant, Privacy First’s lawyer. “There are a lot of people who find it very annoying.” They find it threatening if their personal and financial data are public to everyone.
According to Volgant, this includes shareholders of family businesses and directors of denominations. “They say: I am a director of a church or synagogue, but that does not necessarily have to be registered.”
Legal forms that are newly registered with the Chamber of Commerce must provide this information since September 2020. For existing private limited companies, foundations and other organizations, March 27, 2022 is the deadline.
According to the privacy organization, it is in any case not necessary that the register can be viewed by everyone. But the European Commission does require that. The UBO register is the result of a European anti-money laundering directive, which obliges member states to register and disclose personal data of ‘interested parties’.
Privacy First therefore takes into account that the Dutch court will first ask a European court to assess the legislation. In that case, it is highly questionable whether there is a definitive answer before the deadline of March 27, 2022.
Privacy First has been successful in previous cases. For example, in the lawsuit against the Telecommunications Retention Act and in the case against the System Risk Indication (SyRI), the privacy organization was one of the initiators.