Liechtenstein foundations are known for their secrecy. But such secrecy, is theory, is not absolute. In practice, it may be. So therefore, what is the threshold for someone to have and demonstrate that they ought to know who the true beneficial owner(s) are of such foundations?
That is, in essence, the thrust of a new case before the EFTA Court on a matter of EU/EEA law.
In a new request for an advisory opinion submitted by the Administrative Court of the Principality of Liechtenstein (Verwaltungsgerichtshof des Fürstentums Liechtenstein), the the referring body in a case known as Case E-7/24, AA v Liechtenstein Office of Justice concerns an of interpretation of the Fourth Anti-Money Laundering (AML) Directive (Directive 2015/849), in light of its subsequent amendment, and subsequent case-law of the Court of Justice of the European Union (CJEU).
Within Liechtenstein, the applicant (AA) made a request to the Liechtenstein Office of Justice for access to who the true beneficial owner was of a specific foundation. That Liechtenstein body passed the request onto the Commission of the Register of Beneficial Owners of Legal Entities, who denied the applicants request. When administratively appealled, the Board of Appeal for Administrative Matters (Beschwerdekommission für Verwaltungsangelegenheiten) refused to overrule the decision of the Commission of the Register of Beneficial Owners of Legal Entities. Thus, the matter is now with the Administrative Court of the Principality of Liechtenstein (Verwaltungsgerichtshof des Fürstentums Liechtenstein), who has made the request for an advisory opinion under Article 34 SCA.
In the case at hand before the EFTA Court in Case E-7/24, AA v Liechtenstein Office of Justice, a private party who claims to have been the victim of a predicate offence to money laundering seeks to inspect the register of beneficial owners. Thus far, by both the authority and on administrative appeal, that private party was denied such access on the ground that the applicant was not seen to be an interested party, and that instead, on the basis of the alleged grievance, a complaint to the competent prosecuting authority was the alternative form of remedy that the law afforded them.
The referring court, at first judicial instance, is asking the EFTA Court whether the inspection by a private party, who claims to be the victim of a predicate offence, can inspect the register of true beneficial ownership, on the basis of, under current EU/EEA law, it is appropriate, necessary, and thus, proportionate in order to combat money laundering, predicate offences and terrorist financing.
Under EU/EEA secondary law at it stands, a disclosure of data contained in the register of beneficial owners of legal entities constitutes an interference with the right to informational self-determination of those persons whose data is disclosed. The interference with this informational self-determination is only permissible where it is appropriate, necessary and reasonable to attain an objective in the public interest. But how does one show and/or prove that public interest? And furthermore, in Joined Cases C-37/20 and C-601/20, WW and Sovim SA v Luxembourg Business Registers, the CJEU invalided Article 1(15)(c) of Directive (EU) 2018/843 in so far as it amended point (c) of the first subparagraph of Article 30(5) of Directive (EU) 2015/849 [the Fourth AML Directive] in such a way that, in accordance with that amended version, Member States must ensure that information on the beneficial ownership of all corporate and other legal entities incorporated within their territory is accessible in all cases to any member of the general public.
For the EFTA Court, it now has to try and answer how a private party can demonstrate a legitimate interest in accessing such information from an authority? If they have a legitimate interest, how such such be demonstrated? And moreover, what is the threshold for private person to reach in order for their interest to overbear on that of the true beneficial owner(s) of the Liechtenstein foundation?
The EFTA Court is being asked the following question:
Must Article 1(1) of Directive (EU) 2015/849 and point (c) of the first
subparagraph of Article 30(5) of Directive (EU) 2015/849 in the original version be interpreted as meaning that an inspection of the register of beneficial owners by a private person whose only connection with money laundering, terrorist
financing and associated predicate offences consists in the fact that their financial interests were harmed by a predicate offence is not necessary and thus not
proportionate in order to combat money laundering, predicate offences to money laundering and terrorist financing?
And if the answer to that question is no, then:
Must point (c) of the first subparagraph of Article 30(5) of Directive (EU) 2015/849 in the original version be interpreted as meaning that a private person whose only connection with money laundering, terrorist financing and associated predicate offences consists in the fact that their financial interests were harmed by a predicate offence does not have a legitimate interest in inspecting the register of beneficial owners?
And if the answer to that question is also no, then:
Must point (c) of the first subparagraph of Article 30(5) of Directive (EU) 2015/849 in the original version be interpreted as meaning that a substantiation of a legitimate interest is necessary but also sufficient?
The case before the EFTA Court, lodged in March 2024, known as Case E-7/24, AA v Liechtenstein Office of Justice, will be heard later in 2024, or in early 2025, before its judgment being rendered in 2025. More information can be found here.