Top EU court supports anonymity, corporate transparency is damaged.

In a setback to attempts to combat corruption, the Court of Justice of the European Union decided that the beneficial owners of registered firms can maintain their anonymity.

The ECJ stated in a statement that the court believes that the public's access to data on registered firms' beneficial owners constituted "a severe interference with the basic rights to respect for private life and to the protection of personal data."

The court was urged to make a judgment on Tuesday over the legality of a clause in the 2015 anti-money-laundering directive. Luxembourg passed a bill in 2019 creating a Register of Beneficial Ownership in compliance with the directive.

The court required that information on the beneficial owners of registered entities be entered and kept in that register.

The ECJ was informed that part of the data was available online to the general public.

A Luxembourg firm and its beneficial owner, who had previously attempted to limit the public's access to their information, filed two lawsuits. The Luxembourg District Court asked the ECJ to rule on whether the release of such information may pose an unreasonable danger of impairing the owner's basic rights.

The European Court of Justice declared that the anti-money-laundering directive's requirement that member states make sure that any member of the general public has access to information on the beneficial ownership of corporations and other legal entities incorporated on their territory is unenforceable.

The right to privacy and the right to the protection of personal information, which are guaranteed by Articles 7 and 8 of the Charter, respectively, are gravely violated by the general public's access to information on beneficial ownership.

In fact, the information made available makes it possible for an almost infinite number of people to learn about the material and financial circumstances of a beneficial owner.

'Furthermore, the potential consequences for the data subjects resulting from potential misuse of their personal data are made worse by the fact that, once those data have been made available to the general public, they can not only be freely consulted, but also retained and disseminated,' the statement continues.

Although the court acknowledged that the EU legislature was trying to combat the funding of terrorism and money laundering, it noted that the interference caused by the act went beyond what was strictly required or reasonable.

The ruling, according to campaigners, dealt a severe blow to beneficial ownership transparency and put the battle against international corruption years behind schedule. Access to beneficial ownership data is essential to identifying - and preventing - corruption and dirty money, according to Mara Martini, an expert on illicit money flows at Transparency International. There are more opportunities to make connections as more individuals have access to this information.

'We have seen time and time again how public access to registers helps unearth unethical activities, from the Czech Republic and Denmark to Turkmenistan. The court's ruling throws us back years at a time when the necessity to find corrupt money is so obvious.