Beneficial Ownership

Beneficial ownership refers to the individuals who ultimately own, control, or benefit from a legal entity such as a company, trust, or foundation. These individuals are the true owners behind the legal facade of an entity. The ECJ judgment 2022-912 of 22 November 2022 invalidated general public access to beneficial owner information that was granted by the 5th AML Directive, paving the way for conditional access based on the demonstration of a legitimate interest. The 2024 AML Package introduced harmonised rules for identifying beneficial owners, including a 25% ownership threshold.

• 1Beneficial ownership identifies individuals who exercise ultimate control over an entity, not just legal owners on official documents.
• 2The ECJ ruling of November 2022 (case C-37/20) invalidated general public access to UBO information, requiring demonstration of legitimate interest.
• 3The 2024 AML Package harmonises rules for identifying beneficial owners with a 25% ownership threshold.
• 4Improved rules address multi-layered and complex ownership and control structures.
• 5Centralized national UBO registers must be established and interconnected across EU member states.
• 6Identifying beneficial ownership is an essential component of AML and Know Your Customer (KYC) measures.

• •Business information providers can demonstrate legitimate interest to access UBO registers under the post-ECJ ruling framework.
• •Members must develop robust processes to document and demonstrate legitimate interest for each access request.
• •The 25% ownership threshold and harmonised rules simplify cross-border beneficial ownership verification.
• •Interconnected national UBO registers across the EU improve the quality and completeness of available data.
• •Obliged entities increasingly rely on trusted third-party providers for AML and KYC due diligence.
• •Continuity of UBO data services is critical for obliged entities to meet their regulatory obligations.