Estonia's regulation to hide beneficial owners postponed
The planned concealment of companies' beneficial ownership data, which was due to take effect on Friday, has been postponed, the Ministry of Finance said.
The ministry said it will continue preparing a new framework for access to beneficial ownership data, as feedback received during the interagency consultation process still requires analysis.
"We want the new access model to be legally clear, practical to implement and consistent with European Union law. The feedback received during the consultation process will help improve the draft and we will therefore revise both the regulation and its explanatory memorandum accordingly," said Revo Krause, an adviser in the Ministry of Finance's financial intelligence policy department.
The ministry received feedback on the draft regulation during the consultation process and will use it to revise both the draft and its explanatory memorandum. The comments concern, among other things, the regulation governing legitimate interest, procedures for accessing the register and the relationship between the law and the regulation. Reviewing the proposed changes and revising the draft will take additional time, meaning the changes that had been planned for July 10 will not take effect. Until the new framework enters into force, the current access rules will remain in place, the ministry said.
The Ministry of Finance said it will announce the date when the new framework takes effect after the draft has been finalized and the regulation adopted.
It emerged in early June that the Ministry of Finance planned to restrict public access to companies' beneficial ownership data.
The ministry said the change is intended to strike a better balance between transparency, anti-money laundering efforts and the protection of individuals' privacy.
The changes stem from the European Union's new anti-money laundering legal framework and European Court of Justice case law, under which unrestricted public access to beneficial ownership data is not considered justified.
Latvia, however, has found a way under its laws to keep beneficial ownership information public, limiting access only in individual cases where the law provides a specific need to protect the beneficial owner or their family. In other words, in Latvia, people do not have to apply for access to the information but rather to have it concealed.
Under the changes being prepared by the Ministry of Finance, only authorities that need the information to carry out their duties and individuals who can demonstrate a legitimate interest would have access.
Currently, anyone can view beneficial ownership data in the e-Business Register. Under the European Union's new legal framework, however, access will in future be based on specific legal grounds.
Beneficial ownership data helps identify who ultimately controls a company. The information is needed to combat money laundering and terrorist financing, fulfill customer due diligence obligations and support regulatory oversight.
At the end of June, Minister of Justice and Digital Affairs Liisa Pakosta (Eesti 200) declined to sign the Ministry of Finance's draft regulation.
The proposed changes would also have restricted journalists' access to the information. Anyone seeking access would have had to prove they are a journalist and obtain approval through an application process. The ministry has not explained in detail how such verification of journalists would work.
--
Editor: Valner Väino, Marcus Turovski
