A critical analysis of WM and Sovim SA vs Luxembourg Business Registers and its effect on EU and Maltese law : a concerning precedent in the fight against money laundering or a step in the right direction?

Abstract

This literature-based dissertation delves into the interpretations and conclusions of the influential Sovim SA vs Luxembourg Business Registers judgement concluded in November 2022, and the immediate to long term impact such case will have on the Anti-Money Laundering industry both in the EU and Malta itself. The ECJ court, via the Preliminary Reference mechanism, held that the publication of beneficial owners’ personal data to the general public, as per EU AML Directive 2018/843, goes against articles 7 and 8 of the EU Charter of Fundamental Rights protecting the rights to privacy and data protection respectively. It therefore invalidated certain provisions of the 5th AML Directive and suggested for the implementation of a more refined and comprehensive definition given to the term ‘legitimate interests’, when outlining the requirements imposed for members of the public to comply with, when seeking access to such beneficial ownership data. Besides covering the interpretation and arguments the ECJ made in this case, the dissertation delves deeper into the relevant foreign articles which the court makes reference to, whilst comparing them to Maltese legislation found in the Prevention of Money Laundering and Funding of Terrorism Act. The dissertation then covers the main debate between the need to give the public access towards beneficial ownership data for the prevention of money Laundering purposes, and the obligation to preserve and protect the private life of individuals. Consequently, a critical analysis of various opinions given, relevant to this topic, put forth by numerous stakeholders in the AML and data privacy fields, is made. Ultimately the dissertation seeks to conclude whether the Sovim SA judgement is a step in the right direction for the public, and how Malta should move forward as a jurisdiction following this development.