Netherlands raises unnecessary barriers to anti-corruption and money laundering register in the Netherlands

The Dutch proposed implementation of of the registry of Ultimate Beneficial Owners (UBO) is needlessly restricted, ICTRecht concludes after analysing relevant legislation and a comparative analysis between EU member states. 

“Neither demanding registration nor charging a fee to consult the UBO register is compulsory under the GDPR and neither are they compulsory under the fourth Money Laundering Directive. Charging a fee for every request in particular, even if it is not a high fee, will prevent journalists and researchers from being able to conduct a thorough investigation into financial crime. As long as the information from the UBO register cannot be re-used as open data, there is a lot to be said for not raising these barriers in the first place.”

The law firm was commissioned by Open State Foundation to analyse the relevant legal framework around the UBO register, such as the GDPR, the Open Data and Public Sector Information Directive and the fourth Money Laundering Directive. We wanted to know where the the possibilities lay in opening it up, as a well organised open UBO register will be very useful in tracking money laundering and corruption within the Netherlands, and the rest of the EU. 

The Dutch have chosen for a restrictive way of implementing the UBO registry, though the legislation is still under consideration at the Eerste Kamer (Senate). It suggests a registration for people wanting to consult the registry, as well as paying a fee citing privacy concerns. Even though the Council of State (Raad van State) – which is the highest advisory body in the country – has stated

“The Directive itself takes the GDPR into account. This means that it is not up to the national legislator to add an independent judgement on how the GDPR should be analysed in context with this Directive. The necessary safeguards that the GDPR demands, have been included into the Directive.” [translation ours]

The study by ICT Recht shows that the following basic information from the UBO register can be offered publicly within the limits of the General Data Protection Regulation:

  • name,
  • month and year of birth,
  • state of residence,
  • nationality and
  • the nature and scope of the economic interest held by the UBO.

ICT Recht:

“The information about the nature and scope of the economic interest is one part of the basic information that could be re-used without additional conditions. After all, it concerns information that cannot be blocked based on privacy principles. “

Open Data & PSI Directive 

It is also important to note that the implementation of the UBO registry as it is now proposed in the Netherlands will be outdated by next summer, when the implementation of the Open Data & PSI Directive is due. It clearly marks the companies and company ownership as High Value Datasets.

“If based on the new Re-Use Directive [the PSI and Open Data Directive], the European Commission decides to qualify one or more details from the commercial register as high-quality data sets within the “information about businesses and business property” category, the nature and scope of the economic interest of a UBO can form a part of that virtually always. 

Under that Re-Use Directive, such a data set must be made available free of charge and with as few legal restrictions as possible.”

We urge the Eerste Kamer to take these considerations into account when deciding on the UBO registry in the Netherlands, and we also hope that other Member States in the implementation phase will take the more open approach. Knowing that it is legally possible and unlocks the potential of the UBO register to tackle money laundering and corruption. 

You can download the research here. It is published in both English and Dutch. 

Picture from mohamed Hassan via Pixabay