Money laundering and terrorist financing represent a serious threat to the integrity and stability of the financial system, as well as to the development of the internal market.
Financial analyses and investigations carried out by the competent authorities show the increasing utilisation of complex corporate structures by organized crime and terrorist groups to hide the identity of the real beneficial owners of economic activities and financial flows.
Therefore, the distorted use of corporate structures qualifies as an important high-risk indicator.
While directive 2005/60/EC (third anti-money laundering directive, 3AMLD) focusses on the correct and accurate identification of the beneficial owner, the focus of directive (EU) 2015/849 (fourth anti-money laundering directive, 4AMLD) is transparency of information on beneficial owners.
3AMLD introduced more specific and detailed provisions on the identification and verification of the identity not only of the client, but also of the beneficial owner, and provides a precise definition of beneficial owner in order to facilitate the identification of the same.
Among the measures to reduce the risk of money laundering and terrorist financing, 4AMLD strengthens the rules for the identification of beneficial owners, on the one hand, and requires information on beneficial owners to be kept in proper centralized (and interconnected) registers in each Member state, on the other hand.
Acquiring, keeping and making adequate, precise, and updated information on beneficial owners available is crucial to identify criminals who could otherwise hide their identity behind opaque company structures.
After terrorist attacks in 2016, Directive (EU) 2018/843 (fifth anti-money laundering directive, 5AMLD), expressly identified transparency of companies as an unavoidable condition for the integrity of the EU financial system and strengthening of transparency as a powerful deterrent to money laundering and terrorist financing.
Hence access to information on beneficial owners of entities – including trusts and similar legal entities – must be extended as much as possible and consistently within EU countries through a system of dedicated central registers, such as commerce registers or companies’ registers.
In particular, 5AMLD provides that information on beneficial owners must be always accessible to the public, to the competent authorities and to FIUs without any restriction, as well as to the entities subject to customer due diligence obligations.
However, the directive specifies that the public interest in transparency needs to be limited so to respect the fundamental rights of concerned persons, particularly, safeguard of private life and protection of personal data.
While the majority of Member states have already implemented the EU regulation in their domestic system, the establishment of the register of beneficial owners in Italy is going through a long and difficult process.
Legislative Decree no. 231/2007, modified by Legislative Decrees no. 90/2017 and 125/2019, which implement the fourth and fifth anti-money laundering directive, respectively, originally established the general rules concerning the filling in of and the access to the register of beneficial owners and referred to a proper decree of the Ministry of Economy and Finance together with the Ministry of Economic Development for the detailed regulation.
A first draft of the implementation decree was subject to a public consultation at the end of 2019, but the provision came to light only with the publication of Ministerial Decree no. 55/2022 in the Official Gazette on 25/05/2022, which became effective on 09/06/2022.
A further amendment was necessary following the judgment of the Court of Justice of the European Union dated 22/11/2022 in the joint WM (C-37/20) and Sovim SA (C-601/20) cases, which set aside the obligation introduced by 5AMLD, according to which Member states should make accessible to the public all information on the beneficial owners of legal persons included in central registers in any case.
According to the Luxembourg court, an unlimited public access represents a serious breach of the fundamental rights of safeguard of private life and protection of personal data provided under art. 7 and 8 of the Charter of Fundamental Rights of the European Union and does not represent a necessary and proportioned measure compared to the prevention objective pursued.
Pending a regulatory adjustment to the Court judgment, the Ministry of Enterprises and Made in Italy, in accordance with the Ministry of Economy and Finance, acknowledged the disapplication of the provisions concerning public access to data on beneficial owners of companies and of private legal entities and limited access to the same, as provided for trusts and similar legal entities, and adopted “simplified” certification models.
Currently, the good functioning of the Italian register of beneficial owners is subject to the preparation of the specifications of Infocamere S.c.p.a. on general data protection and the implementation of the order of the Ministry of Enterprises and Made in Italy attesting the effectiveness of the communication system.
For further details on the contents of Ministerial Decree no. 55/2022, please refer to our alert on Clever Desk.