Beneficial ownership transparency in the European Union

In 2016, in response to the tax scandal known as the ‘Panama Papers’, the European Commission put forward a proposal for a 5th EU Anti-Money Laundering Directive. Among other things, the Commission suggested introducing public registers of beneficial owners – something that civil society organisations and the European Parliament had been advocating for many years.

After intense negotiations, a political agreement was reached between the Council of Member States and the European Parliament in December 2017. The final directive was adopted in Spring 2018, and entered into force on 9 July 2018.

Through the 5th Anti-Money Laundering Directive, the EU introduced some significant and important changes to the requirements related to beneficial ownership transparency. The main changes to the Anti-Money Laundering Directive in relation to beneficial ownership transparency are as follows:

  • For beneficial owners of companies, the EU Member States must establish public registers.
  • For beneficial owners of trusts and similar legal arrangements, the EU Member States must establish registers that should be accessible to everyone with a ‘legitimate interest’. For trusts that own a company not incorporated in the EU, access to the register should be given upon written request.
  • The European Commission must ensure that the company and trust registers of Member States are interconnected.