The search of Ireland’s register of beneficial owners – a key tool in the fight against money laundering here and across the EU – has been suspended following a landmark ruling by the European Court of Justice.
Under EU anti-money laundering legislation, Member States were required to set up and maintain a register of beneficial ownership (RBO) of companies established on their territory.
It is seen as crucial in unmasking owners hiding behind often complex, cross-border webs of shelf companies.
However, in a judgment last week, the Court found that unrestricted public access to details of the beneficial owner “constitutes a serious interference with fundamental rights to privacy and the protection of personal data”.
The Court said it made the decision in the light of Articles 7 and 8 of the Charter of Fundamental Rights of the European Union, which enshrine the right to privacy.
Campaign group Transparency International said the decision could set back the fight against corruption, organized crime and tax evasion by 30 years.
Hundreds of thousands of Irish companies have registered their property details with the RBO, which has been searchable by law enforcement, the media and the public. However, access to the database search function is now blocked.
“Following the recent judgment of the European Court of Justice, the search function in the RBO register for beneficial ownership information is now suspended,” the website reads.
“The RBO is currently working on making access only available to certain individuals,” she adds.
Whilst a company’s failure to register ownership details with the RBO within a certain time frame can result in hefty fines of up to €500,000, the database has also uncovered persistent and serious weaknesses in the Irish company registration process.
For example, many fake companies do not register ownership records with the RBO and are allowed to continue to operate.
Fake companies can be used for a range of illegal activities such as money laundering and sanctions evasion.
The Companies Registration Office (CRO), which oversees the RBO, even acknowledged earlier this year that while up to 30,000 companies had not registered with the mandatory RBO, it was impossible to prosecute all companies that had not registered .
investigations of Irish Independent found that hundreds of front companies have been formed here and that despite some efforts by the CRO to address the problem, new front companies continue to be formed.
With database searches now suspended, what is seen as a key tool in the fight against criminal activity is now out of service.
John Devitt, the chief executive of Transparency International Ireland, said last week that the register is not only important for tackling potential crime.
“Any investor, tenant or customer of a company has the right to know who owns the company they are dealing with.”
https://www.independent.ie/business/european-court-ruling-halts-access-to-key-irish-company-ownership-database-42183693.html European Court of Justice ruling halts access to key Irish corporate property database