Anti-Money Laundering: Register of Beneficial Owners - The Council of State refers to the CJEU

The register of beneficial owners is a fundamental tool in the fight against money laundering and terrorist financing. It allows the identification of individuals who, directly or indirectly, own or control a company or legal entity. To this end, Legislative Decree 231/2007, which transposes the European anti-money laundering directive, introduced the obligation for companies to communicate the data of their beneficial owners. This obligation was further detailed by the implementing regulation, which established the methods for collecting and accessing such information.

However, its implementation has raised numerous legal issues, initially involving the Lazio Regional Administrative Court (hereinafter “T.A.R. Lazio”) and subsequently the Council of State, which, with the ordinance of 15 October 2024, referred the matter to the Court of Justice of the European Union.

In December 2023, some associations representing the interests of trustees filed a series of claims to request the annulment of the package of decrees regarding the register of beneficial owners, in particular the Interministerial Decree no. 55 of 11 March 2022, the Decree of the Ministry of Enterprise and Made in Italy (MIMIT) dated 29 September 2023, as well as the “Operational Manual for the telematic transmission of the communication of the beneficial owner to the offices of the company registry”.

Following these claims, the ordinance of T.A.R. Lazio no. 8083 of 6 December 2023 granted the claimants” precautionary petition recognizing “worthy of protection the claimant’s interest in maintaining the res adhuc integra until the definition of the judgment on the merits” and to that effect suspended the effectiveness of the MIMIT”s Decree. As a result, the deadline for the first communication to the register of beneficial owners was suspended, which, according to the relevant regulations, had to be made within 60 days from the date of publication in the Official Gazette of the MIMIT’s Directorial Decree of 29 September 2023, i.e. by 11 December 2023.

On 9 April 2024, the T.A.R. Lazio with six substantially identical sentences (no. 6837, 6839, 6840, 6841, 6844, 6845), rejected the claims filed by said associations and as a result the deadline for the communication of the beneficial owner to the Register was postponed to 11 April 2024.

Following the appeals by said associations of the sentences, the Council of State on 17 May 2024, upon an initial summary examination, found that the issues raised by the parties were particularly complex, and required an in-depth examination of the merits. Therefore, it ordered the suspension of the enforceability of the sentences of the T.A.R. Lazio of 9 April 2024. However, since these decisions came after the expiry of the deadline to provide for communication set for 11 April 2024, (only) the consultation of data and information on actual ownership, as well as requests for accreditation by the obliged parties and requests for access by the legitimised parties were suspended.

Following the expiry of the deadline for the submission of communications to the register of beneficial owners, there has been a debate as to whether the territorially competent Chambers of Commerce can issue penalties for late communications pursuant to Article 2630 of the Civil Code, which states that “Whoever, being obliged to do so by law, because of the functions he performs in a company or in a consortium, fails to make, within the prescribed time limits, reports, communications or filings with the companies register shall be punished with a pecuniary administrative sanction ranging from EUR 103 to EUR 1,032. If the report, communication or filing is made within thirty days following the expiry of the prescribed time limit, the pecuniary administrative sanction is reduced to one third”. 

In view of the abovementioned, on 23 May 2024 the National Council of Certified Public Accountants and Accounting Experts (CNDCEC) published a statement in which it ruled out that “the territorial Chambers of Commerce may proceed to ascertain alleged violations and, consequently, to apply penalties for omitted or late reporting by obliged parties”. This is because the Council of State’s conclusions could sweep away the entire system of the register of beneficial owners, including the obligation to make the communications on which the penalties would be based.

However, the MIMIT, due to the complex judicial case, has not taken a position, leaving “to the prudent appreciation of the Chambers of Commerce any useful initiative to facilitate the correct fulfilment of the disclosure obligations in question”. Consequently, since the CNDCEC’s opinion is not binding and MIMIT has not adopted a position, some Chambers of Commerce may well decide to issue penalties in the event of omitted or late disclosure of the beneficial owner. 

The ordinance of the Council of State no. 8248/2024 of 15 October 2024 (hereinafter “Ordinance”) delays one more time the full operationality of the register of beneficial owners in Italy.

In fact, the Council of State noted that the provisions of the implementing regulation could violate Articles 7 and 8 of the Charter of Fundamental Rights of the European Union, which protect the right to privacy and the protection of personal data. Additionally, Articles 15 and 45, relating to the freedom of establishment and movement, and Articles 20 and 41, which guarantee equality and the right to good administration, were cited. In particular, the Council of State in point 9 of the Ordinance states that “the issues raised by the parties were of particular complexity and required the in-depth examination typical of the merits phase, especially concerning the compliance of domestic legislation with Union law and the validity of some of the Directive’s provisions under superior Union law.”

The Council of State also highlighted the risk of excessive compliance burdens for the appellants, which could be burdened with communication obligations not legitimately imposed. The ordinance points out that fulfilling the communication obligations under Article 21, paragraph 3, of Legislative Decree 231/2007, could result in prejudice due to the publication of sensitive/confidential data.

In light of the sensitivity of the issues briefly outlined above, the Council of State referred six preliminary questions to the CJEU regarding the interpretation and validity of Directive (EU) 2015/849, as amended by Directive (EU) 2018/843, in relation to Italian legislation governing fiduciary companies:

Paragraph 40 of the Council of State’s ordinance concerns the request to submit the case to an expedited procedure before the CJEU, pursuant to Article 105 of the Court’s Rules of Procedure. The Council of State justifies this request with the need for a rapid resolution of the issue, stating: “i) the effectiveness of national measures has been suspended by this Judge, given the sensitivity of the issues involved and the need to first refer to this Court for the exact interpretation to be provided to European Union law; ii) the decision referred to in the previous number was also taken considering that the lack of suspension would have obliged all fiduciary companies to provide information on beneficial owners, in a situation where the existence of such an obligation could not be affirmed with certainty by this Judge without first referring to this Court of Justice; iii) the decision of this Judge has, in fact, limited its effects to fiduciary companies only, although the representatives of the appellant Administrations and the Rome Chamber of Commerce stated, in the public hearing of 19 September 2024, that this situation would affect the entire implementation system of the 2018 Directive; iv) at present, the concrete implementation of the Directive’s provisions in the Italian legal system is, therefore, “frozen” pending the decision of this Court of Justice.”

Therefore, the situation has remained basically unchanged since the Council of State’s Order of 17 May 2024, after which the Chambers of Commerce adopted varied behaviour. Some suspended the duty of disclosure together with the right of access, while others suspended only the right of access. In this situation of uncertainty, the Chambers of Commerce are waiting to receive soon information from Unioncamere in order to standardise the application of this troubled regulation at national level.