15 December 2022
1.Legal framework in Bulgaria
In 2018 in Bulgaria, the new Measures Against Money Laundering Act was adopted, in accordance with the European Directive 2015/849/EU (the 4th Directive on Money Laundering).
Based on the new Act all legal entities are obliged to indicate the individual(s) who are the ultimate beneficial owners of the relevant legal entity, if the information is not publicly available in the Trade register.
Disclosing of the beneficial owners of legal entities is entered in the Trade Register or in the Bulstat Register under the company’s profile and information is public to anyone who is interested in.
2.New position of the Court of Justice of the European Union (CJEU)
With a Decision from 22.12.2022 CJEU has ruled that the provision which provides that information on the beneficial owners of companies established in the territory of the Member States available in all cases to the general public is INVALID.
The decision of the CJEU was issued on a preliminary inquiry, in connection with two appeals filed respectively by a Luxembourg company and by a beneficial owner of such a company, who unsuccessfully asked the national court to limit the access of the general public to information concerning them. It is considered that the disclosure of such information may lead to a disproportionately high risk of violating the fundamental rights of the relevant beneficial owners.
The CJEU accept that the general public’s access to information about the beneficial owners constitutes a severe interference with the fundamental rights to respect for private life and to the protection of personal data provided in Articles 7 and 8 of the Charter of the general rules, respectively, the disclosed information allows a potentially unlimited number of persons to obtain information about the material and financial situation of the beneficial owners. In addition, the potential risks to the individuals concerned of possible misuse of their personal data are even greater because, once made available to the general public, such data can not only be freely viewed, but also stored and distributed.
It should be noted that the preliminary inquiry allows the jurisdictions of the Member States to turn to the Court of Justice with a question concerning the interpretation of Union law or the validity of an act of the Union. The Court does not decide the national dispute. The national jurisdiction should be exercised on the case in accordance with the decision of the court. This decision binds the other national jurisdictions in the same way when they are referred to a similar matter.
3.Consequences of the CJEU’s decision
The Court’s decision could bring a significant change in the applicability of the provisions of the Measures Against Money Laundering Act. In case of dispute in relation to disclosing of the beneficial ownerse the relevant party can refer to the decision.
It is important to be mentioned that some of other EU member states (Cyprus, Netherlands) have already blocked the public’s access to the information published in the relevant registers concerning the UBO’s.
Please do not hesitate to contact our team for any clarification or enquiry.