19 June, 2024

Register of beneficial owners: new suspension for fulfilment of the communication of the beneficial owner obligation

On May 17th, the Administrative Council of State suspended the effectiveness of the ruling of the Administrative Tribunal of Lazio, which rejected the action proposed by several trust companies and associations to obtain the annulment of the decree of the Ministry of Enterprise and Industry (MIMIT) concerning the communication to the register of beneficial owners of 29 September 2023. The Council of State stated that such issues at stake presented a level of complexity that required a full knowledge phase of the judgement.

In this connection, the rulings in question had found the claimants’ grounds to be unfounded, which, in particular, challenged:

• the inclusion of the trust mandate among legal institutions related to trusts; and
• the generalised form of access to beneficial ownership information disclosed by trusts and related legal institutions.

The Administrative Tribunal of Lazio rejected the claimants’ requests, re-establishing the term for the first registration in the beneficial ownership section of the Companies Register by the obliged parties, because:

• with regard to the first ground of complaint, the institutions akin to the trust must include not only those cases of transfer of ownership of the assets, but also those of mere management of the asset on behalf of a third party (the trustee), which are features found in the institution of the fiduciary trust. In addition, since the purpose of such institution is to attribute the formal ownership of the assets and the legitimacy of the exercise of certain rights normally pertaining to the owner to a person other than the owner, without prejudice to the substantial ownership of the same by the trustee, it is clear that the fiduciary mandate produces precisely that effect of obscuring the actual ownership which the anti-money laundering legislation aims to counteract;
• with reference to the second ground, the Administrative Tribunal points out that access to information is not generalised, but is limited – for obliged persons – to the need for them to carry out an activity in support of the obligations of the general customers’ due diligence and – for anyone demonstrating a legitimate interest – to the condition that the interest underlying it is consistent and coherent with the purposes envisaged by the anti-money laundering legislation.

However, the Council of State, deeming it necessary to further investigate the issues of the incompatibility of the Italian legislation with the European legislation and the very validity of certain provisions of Directive (UE) 2015/849 to the principles of the superordinate European law, set the hearing for the discussion of the merits to 19 September 2024.

Considering that the continuing effectiveness of the contested ruling of the Administrative Tribunal of Lazio, having regard to the fact that the term to comply with the communication obligation is about to expire, would result in an irreparable prejudice to the claimants deriving from the disclosure of sensitive data, the Council of State upheld the claimants’ motion and pronounced a protective measure, suspending, until the ruling on the merits both the obligation to make the disclosure of the beneficial owner and the commencement of the consultation of the data.