The Court of Justice of the EU on 22 November emphatically struck down the public accessibility of the Ultimate Beneficial Owner (UBO) register. The general public having access to information on beneficial owners of companies and other legal entities constitutes a serious breach of privacy. In a principled ruling, the 15 judges of the Grand Chamber of the European Court explain that the fight against money laundering and terrorist financing is primarily a matter for public authorities. The fight against money laundering does not justify making a register containing privacy-sensitive data public to everyone, the highest European court stated. The entire text of this landmark decision can be found here.
Privacy First very much welcomes the critical and principled ruling by the Court of Justice. It provides a substantive ruling on the questions that Privacy First previously raised about the UBO register.
In early 2021, Privacy First filed summary proceedings against the UBO register, insisting that the Dutch court would take the case to the EU Court of Justice. The Dutch judge subsequently declined to do so because a similar Luxembourg case had just been submitted to the Court of Justice. The preliminary injunction court did however confirm that there is every reason to doubt the validity of the European Money Laundering Directives that form the basis of the UBO register. The judge ruled that the possibility could not be excluded that the highest European court would conclude that the public nature of the UBO register is not in line with the principle of proportionality. This judgment was upheld on appeal.
‘The introduction of the UBO register would mean that privacy-sensitive data of millions of people will be up for grabs’, Privacy First’s attorney Otto Volgenant of Boekx Attorneys commented at the time. ‘On all sides there are strong doubts whether this is actually an effective means in the fight against money laundering and terrorism. It’s like using a sledgehammer to crack a nut. The Court of Justice of the European Union will eventually adjudicate the case, and I expect it will annul the UBO register.’
This is indeed what happened last week. The public character of the UBO register is off the table. The main considerations of the EU Court of Justice ruling can be summarized as follows:
Making UBO data available to the public is a serious intrusion into the privacy of UBOs. Based on the information from the UBO register, a profile can be created that includes certain personal identification data, details on the person’s financial situation as well as the economic sectors, countries and specific companies in which they have invested. A freely accessible UBO register makes these data available to an unlimited number of individuals, including those who wish to view it for reasons that need not be related to anti-money laundering regulations. Not only are the UBO data freely accessible to anyone, it can also be stored and further disseminated by third parties, making it increasingly difficult or even illusory for UBOs to defend themselves against improper use.
Combatting money laundering and terrorist financing is a public interest objective that may justify the privacy intrusion that arises with a UBO register, but this does not mean without question that everyone should have access to that register.
The EU Court explains that the following questions must be assessed in this context:
1. Is the public accessibility of the UBO register an appropriate tool in the fight against money laundering?
2. Does the intrusion on the privacy of UBOs through public access meet the requirement of subsidiarity and is the public access limited to what is strictly necessary? In other words, can the fight against money laundering not reasonably be carried out just as effectively in another way that less affects the fundamental rights of the individuals concerned?
3. Is the privacy intrusion resulting from full disclosure of the UBO register proportionate, when weighing the importance of combatting money laundering on the one hand and the seriousness of the privacy intrusion on the other?
The first of these questions was addressed by the Court of Justice only briefly: a publicly accessible UBO register may, through the resulting transparency, contribute to an environment that is less likely to be used for money laundering. But with regard to the other two questions, the public nature of the UBO register does not meet the requirements to be imposed.
The Court’s answer to the second question is that the privacy violation that is the consequence of full disclosure of the UBO register is not strictly necessary. A previous version of the anti-money laundering regulations stated that ‘persons or organizations that can demonstrate a legitimate interest’ can have access to the UBO register. In its ruling, the Court specified the groups that may have such a legitimate interest:
a. the press and civil society organizations concerned with preventing and combatting money laundering and terrorist financing;
b. individuals who want to know the identity of a UBO in the context of a potential financial transaction; and
c. financial institutions and authorities involved in the fight against money laundering and terrorist financing.
The European Commission indicated earlier that it is difficult to give a legal definition of the concept of ‘legitimate interest’. The Court, however, found this too short-sighted: the fact that it is difficult to define this concept does not justify giving access to everyone. And so the public accessibility of the UBO register was cast aside, because the invasion of UBO’s privacy is not limited to what is strictly necessary.
In answering the third question, as to the proportionality of the privacy invasion in relation to the importance of anti-money laundering objectives, the Court also allows privacy to prevail. The fight against money laundering and terrorist financing is primarily a task of governments and financial institutions, which already had full access to the UBO register. Extending access to the UBO register to the entire public results in a significantly greater invasion of privacy, without being offset by benefits in the fight against money laundering and terrorist financing.
For the Netherlands, this means that the UBO register may no longer be publicly accessible with immediate effect. Immediately after this ruling, Privacy First called on the Dutch Minister of Finance to comply with the Court’s decision as soon as possible. On the very day of the ruling this call was heeded and an end was put to the public accessibility of the UBO register. This is a major victory for privacy. The goal of the lawsuit that Privacy First started in 2021 has thus been achieved. The UBO register is no longer publicly accessible. In the event the Dutch government fails to comply with this ruling, Privacy First will start new summary proceedings to enforce the EU Court ruling.
There will possibly be a discussion about the delineation of the group of persons who have access to the UBO register on the basis of a ‘legitimate interest’. This discussion is best conducted at the EU level, as anti-money laundering rules are also EU rules. This will also allow the European Data Protection Supervisor (EDPS) to get involved in the substance of this matter. This independent supervisor already in 2017 advised that public accessibility of the UBO register would not be proportionate.
Unfortunately, the European legislature did not heed that advice at the time. It happens more often that the European legislator drafts rules that are a major violation of privacy, which, years later, the highest European court indeed confirms to be the case. It is good that the European Court of Justice is critical and weighs the importance of privacy. After all, the courts have the final say in any democracy under the rule of law, and the EU Court of Justice’s Grand Chamber has ruled in favor of privacy time and again in recent years. But it would be even better if regulators themselves valued the importance of privacy protection as it would mean governments would not commit as many privacy violations in the first place.
Over a decade ago, around the years 2009-2011, there was enormous social resistance in the Netherlands to a centralized database containing the biometric data (fingerprints and facial scans) of all Dutch citizens. The development of that database was halted in early 2011 over privacy concerns. However, the Dutch State Secretary for Digital Affairs, Alexandra van Huffelen, now seems intent on introducing such a database after all. Below you find the first response of Privacy First to the recent internet consultation on this wretched plan:
The Privacy First Foundation was perplexed to learn of your intention to amend the Dutch Passport Act in order to create a centralized database of everyone's biometric data (including facial scans and – for the time being – ‘temporary’ fingerprints). This comes after the original plan for such a database was binned in 2011, and rightly so, following two years of large-scale resistance from all sections of Dutch society and all sorts of legal, political, administrative and technical objections. Back then, not a single public official could be found even within the Dutch Ministry of the Interior who dared to openly advocate the development of such a database. In the years since, this ‘progressive insight’ within your ministry has apparently disappeared entirely, which is remarkable at a time when international developments compel you not to forget the historical lessons about the risks of centralized population registers. A centralized biometric database inevitably creates an extremely risky target for people with malicious intent. The necessity and proportionality of such a database are not amply elaborated in the draft Explanatory Memorandum to the current Bill, in fact, are not elaborated at all and, for that matter, are inconceivable. Moreover, experience has shown that such databases will always be used and abused over time for all kinds of unforeseen purposes (function creep) and that original retention periods will be stretched further and further. In this context, Privacy First would like to remind you of the fact that the previously planned centralized biometric database included clandestine, secluded access to the Dutch secret services (who, to this end, were also involved in the development of this database), one of which – the General Intelligence and Security Service (AIVD) – in the end considered the realization of this database too hazardous. There is no reason to believe the considerations of that time should not apply today.
Ever since Privacy First was founded in 2008, we have opposed the mandatory collection of fingerprints for passports and identity cards. Since the introduction of the new Passport Act in 2009, Privacy First has done this through lawsuits, campaigns, Freedom of Information Act requests, political lobbying and outreach to the media. Despite the subsequent termination of the (planned) centralized storage of fingerprints in both a national and municipal databases in 2011, fingerprints are still taken of everyone applying for a passport and again also for Dutch identity cards (under the new EU regulation on strengthening the security of identity cards), after this requirement was abolished in 2014. To date, however, all of the millions of fingerprints collected from virtually the entire Dutch adult population have in practice not been used, or have hardly been used as this had already proved to be technically unsound and unworkable in 2009. The compulsory collection of everyone’s fingerprints under the Passport Act is therefore still the most massive and longest-lasting privacy violation that the Netherlands has ever known. Against this background, we request you to withdraw the present draft bill and to replace it with a new bill to abolish the taking of fingerprints under the Passport Act, even if that runs counter to European policy. Please take the following into account:
1. Already in May 2016, the Dutch Council of State (Raad van State) ruled that fingerprints in Dutch identity cards violate the right to privacy due to a lack of necessity and proportionality, see https://www.raadvanstate.nl/pers/persberichten/tekst-persbericht.html?id=956.
2. Freedom of Information Act requests from Privacy First have shown that the phenomenon to be defeated (lookalike fraud through passports and identity cards) is so small in scale that the compulsory taking of everyone’s fingerprints to make an end tot this problem, is completely disproportionate and therefore unlawful. See https://www.privacyfirst.nl/rechtszaken-1/wob-procedures/item/524-onthullende-cijfers-over-look-alike-fraude-met-nederlandse-reisdocumenten.html.
3. The fingerprints in passports and identity cards previously had a biometric error rate of no less than 30%, see https://zoek.officielebekendmakingen.nl/kst-32317-163.html (State Secretary Fred Teeven, January 31, 2013). Before that, Minister Piet Hein Donner admitted there’s an error rate of 21-25%: see https://zoek.officielebekendmakingen.nl/kst-25764-47.html (27 April, 2011). How high are these error rates in 2022?
4. Partly because of the aforementioned high error rates, the fingerprints in passports and identity cards have hardly been used to date, neither in the Netherlands nor at the national borders or airports.
5. Because of these high error rates, former State Secretary Ank Bijleveld instructed all Dutch municipalities as early as September 2009 to refrain in principle from fingerprint verifications when issuing passports and identity cards. In the event of a ‘mismatch’, the ID document concerned would have to be returned to the passport manufacturer, which would lead to rapid social disruption if the number of such cases were high. In this context, the Ministry was also concerned about possible large-scale unrest and even violence at municipal counters. These concerns and the instruction of State Secretary Bijleveld still apply today.
6. A statutory exception must still be created for people who, for whatever reason, do not wish to have their fingerprints taken (biometric conscientious objectors, Article 9 ECHR).
For further background information on the biometric passport, see the report by the Advisory Council on Government Policy (WRR) titled ‘Happy Landings’, written in 2010 by the undersigned. Partly as a result of this critical report (and large-scale legal action by Privacy First against the Passport Act), the decentralized (municipal) storage of fingerprints was largely abolished in 2011 and the planned centralized storage of fingerprints was discontinued.
We sincerely hope that it will not have to come to another lawsuit by Privacy First to turn the tide.
If desired, we would be happy to elaborate on the above aspects in greater detail.
Privacy First Foundation
Source: https://www.internetconsultatie.nl/biometrischegegevenspaspoortwet/b1 --> reacties --> reactie directeur Privacy First (Vincent Böhre) dated May 31, 2022.
A coalition of civil rights organizations in the Netherlands that had previously won a lawsuit against System Risk Indication (SyRI) is calling on the Dutch Senate to reject an even more sweeping Bill dubbed ‘Super SyRI’. According to the parties, the proposal is on a collision course with the rule of law while the Dutch government refuses to learn lessons from the childcare benefits scandal, one of the largest scandals in Dutch politics in recent decades.
The Data Processing by Partnerships Act (Wet Gegevensverwerking door Samenwerkingsverbanden, WGS) enables Dutch government agencies and companies to link together the data stored about citizens and companies through partnerships. Public authorities and companies that take part in such cooperative frameworks are obliged to pool together their data. This should help in the fight against all kinds of crime and offenses.
Under the Act, it is not just data that companies and public authorities share with each other. Signals, suspicions and blacklists are also exchanged and linked together. On the basis of this form of shadow record-keeping, these parties can coordinate with each other enforcement ‘interventions’ against citizens who end up in their crosshairs.
Public authorities and companies targeting citizens through data surveillance
In order to enable the large-scale sharing of personal data between public authorities and companies, the Act casts aside numerous confidentiality obligations, privacy rights and legal safeguards that have traditionally applied to the processing of personal data. This leads to a "far-reaching, large-scale erosion of the legal protection of citizens", according to the opposing coalition of which Privacy First is a member: "If this Bill is adopted, the door will be left wide open for the executive branch of the government and private parties to subject both citizens and companies to arbitrary data surveillance."
Through the Act, the Dutch government also wants to create the possibility to start new partnerships in case of ‘urgency’, without providing Parliament the opportunity of examination. The Dutch House of Representatives will be informed about such partnerships only after their establishment, then having to decide whether to pass them into law. This is contrary to the Dutch Constitution, which stipulates that legislation approved by Parliament should include privacy protections. The parties find it unacceptable that Parliament is not involved in the formation of new partnerships and can decide on them only after they have been established.
Legitimizing unlawful practices that have lasted for years
In addition to the possibility of establishing new partnerships, the Act includes four partnerships that have been around for years, but have never been laid down in law. The cabinet now wants to retroactively create a legal basis for these partnerships.
The parties that brought legal proceedings against System Risk Indication (SyRI) point out that SyRI, which was prohibited by the court, was also used for years without a legal basis. According to the parties, there are strong similarities with the partnerships that the new Bill is now intended to legitimize: "Drastic practices in which personal data are processed in violation of the fundamental rights of citizens were set up as a trial and continued for years, only to be given a legal basis as a fait accompli. Fundamental rights that should protect citizens against unjustified government action thereby become mere obstacles for the government to overcome."
Risk assessments, blacklists and suspicions
The coalition previously wrote that the practices under the Act are in many ways similar to the data processing that preceded the childcare benefits scandal that sent shock waves through Dutch society. Based on secret data analyses, lists of citizens who had been falsely labeled by the tax authorities as criminal fraudsters were distributed through various agencies, ruining the personal lives of tens of thousands of families. Under the partnerships that would be made possible by the Act, public authorities and companies would be able to abundantly share risk analyses, blacklists and many other types of data, suspicions and signals about citizens. The Dutch Data Protection Authority advised the Senate in November 2021 not to pass the law, stating that the proposal could lead to "Kafkaesque situations for large numbers of people".
The civil society coalition against SyRI consists of the Dutch Civil Rights Platform (Platform Bescherming Burgerrechten), the Dutch Lawyers Committee for Human Rights (NJCM), Dutch trade union FNV, the Dutch National Clients Council, Privacy First, the KDVP Foundation and authors Maxim Februari and Tommy Wieringa.
Download the recent letter by the coalition to the Dutch Senate HERE (pdf in Dutch).
Source: https://bijvoorbaatverdacht.nl/syri-coalitie-eerste-kamer-moet-datasurveillancewet-super-syri-afwijzen/, 15 February 2022.
A Dutch court has ruled on appeal in the summary proceedings brought by Privacy First concerning the Ultimate Beneficial Owners (UBO) register. Like the preliminary relief court, the Court of Appeal of The Hague unfortunately rejected Privacy First’s claims.
The court in preliminary relief proceedings earlier confirmed that there is every reason to doubt the legal validity of the European money laundering directives that form the basis for the UBO register. The judge ruled that it cannot be precluded that the highest European court, the Court of Justice of the EU (CJEU), will conclude that the public nature of the UBO register is not in line with the principle of proportionality. The ruling of the CJEU is expected in mid-2022.
Existing legal entities in the Netherlands do not have to register their UBOs until 27 March 2022. This is different for new legal entities: these have to register their UBOs immediately. The Court of Appeal of The Hague deems it unlikely that these UBOs will suffer serious damage in the short term and points out that UBOs fearing to be at risk from the disclosure of personal data can immediately shield these data from the general public. Dutch law provides for this possibility. The Hague Court of Appeal called this ‘a simple way to prevent UBO data from becoming or remaining public’. UBOs can apply to the Trade Register for shielding. As long as such applications are pending, UBO data will actually be protected. Now that the Court of Appeal has so emphatically pointed out this possibility, it is expected that many UBOs will follow this route.
‘The solution must come from the highest European court, the Court of Justice of the EU’, comments Privacy First’s attorney, Otto Volgenant of Boekx Attorneys. ‘It will rule on this in mid-2022. I expect that the Court will mark the end of the open nature of the UBO register. Thus far hardly any data have been entered into the register and I advise everyone to just wait as long as possible. The Dutch government has arbitrarily chosen a date by which UBOs must provide their data, namely 27 March 2022. It would be wise to postpone that end date by a few months until after the CJEU has provided clarity. That would prevent a lot of trouble and unnecessary costs.’
The judgment (in Dutch) of the district court in preliminary relief proceedings can be found here:
while the judgment (in Dutch) of the Court of Appeal can be found here:
Update 14 April 2022: further legal action by Privacy First against the UBO register may follow in mid-2022, depending on the outcome of similar Luxembourg lawsuits at the EU Court. Recently, Dutch Parliament passed a motion that until the ruling of the EU Court no fines should be imposed on organizations that have not yet registered their UBOs. It also seems that the UBO registration obligation of foundations and associations will not be enforced for the time being. Privacy First closely follows these developments and tries to have a positive influence on them as much as possible.
Today, Privacy First sent the following plea to the Dutch House of Representatives:
Dear Members of Parliament,
It is with great disapproval that the Privacy First Foundation has taken note of the planned introduction of coronavirus entry passes for bars and restaurants, events and cultural institutions. This will lead to a division in society, exclusion of vulnerable groups and a massive violation of everyone’s right to privacy. Below, Privacy First will briefly explain this.
Serious violation of fundamental rights
The coronavirus entry pass (‘corona pass’) constitutes a serious infringement of numerous fundamental human rights, including the right to privacy, physical self-determination, bodily integrity and freedom of movement in conjunction with other classic human rights such as the right to participate in cultural life and various children’s rights such as the right to recreation. Any curtailment of these rights must be strictly necessary, proportionate and effective. In the case of the corona pass, however, this has not been demonstrated to date and the required necessity is simply being assumed in the public interest. More privacy-friendly alternatives to reopen and normalize society seem never to have been seriously considered. For these reasons alone, the corona pass cannot pass the human rights test and should therefore be repealed. In this context, Privacy First would also like to remind you of countries such as England, Belgium and Denmark where a similar pass was deliberately not introduced, or has been done way with not long after its introduction. In the Netherlands, there has been a great lack of support in recent days for the corona pas and many thousands of entrepreneurs have already let it be known that they will not cooperate. Privacy First therefore expects that the introduction of the corona pass will lead to massive civil disobedience and successful lawsuits against the Dutch government.
The introduction of the corona pass violates the general prohibition of discrimination, as it introduces a broad social distinction based on medical status. This puts a strain on social life and may lead to widespread inequality, stigmatization, social segregation and even possible tensions, as large groups in society will not (or not systematically) want to, or will not be able to get tested or vaccinated (for a variety of reasons), or obtain a digital test or vaccination certificate. During our National Privacy Conference in early 2021, Privacy First already took the position that the introduction of a mandatory ‘corona passport’ would have a socially disruptive effect. On that occasion, the Dutch Data Protection Authority, among others, explicitly took a stand against the introduction of such a passport. The aforementioned social risks apply all the more strongly to the vaccination coercion that is caused by the introduction of the corona pass. In this regard, Privacy First would like to remind you of the fact that both your House of Representatives and the Parliamentary Assembly of the Council of Europe have expressed their opposition to a direct or indirect vaccination requirement. In addition, the corona pass will have the potential to set precedent for other medical conditions and other sectors of society, putting pressure on a much wider range of socio-economic human rights. For these reasons, Privacy First calls on you to block the introduction of the corona pass.
Multiple privacy violations
From the perspective of the right to privacy, there are a number of yet other specific concerns and questions. First of all, the corona pass introduces a mandatory ‘health proof’ for participation in a large part of social life, in flagrant violation of the right to privacy and the protection of personal data. Through the mandatory display of an ID card in addition to the corona pass, an entirely new identification requirement is created in public places. The existing anonymity in the public space is thus removed, with all the dangers and risks that this entails. Moreover, this new identification requirement raises questions about the capacities of entrepreneurs to determine the identity of a person and to assess the state of health by means of the corona pass.
Moreover, the underlying legislation results in the inconsistent application of existing legislation with regard to the same act, i.e. testing, with far-reaching consequences on the one hand for an important attainment such as medical confidentiality and the public’s trust in that confidentiality, and on the other for the practical implementation of retention periods of the test results while the processing of these results does not change. After all, it is not the result of the test that should determine whether the registration of the testing falls under the Dutch Medical Treatment Agreement Act (‘Wgbo’, which requires medical confidentiality and a 20-year retention period) or the Dutch Public Health Act (‘Wpg’, which requires a 5-year retention period), but the act of testing itself. Besides, it is questionable why a connection was sought with the Wpg and/or Wgbo now that it is about obtaining a certificate for participation in society and it does not concern medical treatment (Wgbo) or public health tasks for that purpose. The only ground for processing personal data for the purpose of ascertaining the presence of the coronavirus and for breaching medical confidentiality, should be consent. However, in this case there cannot be the legally required freely given consent, since testing and vaccination will be a mandatory condition for participation in society.
Privacy requires clarity
Many other things are and remain unclear: what data will be stored, where, by whom and in which systems? To what extent will there be an international and European exchange of such data? Which parties with which purposes will have access to or will copy the data, or put these in huge new national databases together with our health data? Will we have constant personal localization and identification, or only occasional verification and authentication? Why can test results be kept for an unnecessarily long time? How great are the risks of hacking, data breaches, fraud and forgery? To what extent have decentralized, privacy-friendly technologies and privacy by design, open source software, data minimization and anonymization seriously been considered? How long will test certificates remain free of charge? Is work already underway to introduce an ‘alternative digital medium’ to the Dutch CoronaCheck app, namely a chip (card), with all the objections and risks that entails? Why has there been no independent Privacy Impact Assessment (PIA)? How many more times must the country accept emergency laws to close privacy leaks, when our overburdened and understaffed Data Protection Authority is already noting that there is no legal basis for the processing of the data concerned? How will unforeseen uses and abuses, function creep and profiling be prevented, and how is privacy oversight arranged? Will non-digital, paper alternatives remain available at all times? Why is the ‘yellow booklet’ not accepted as a privacy-friendly alternative, as it is in other countries? What happens with the test material – i.e. everyone’s DNA – at the various testing sites? And when will the corona pass be abolished? In other words, to what extent is this actually a ‘temporary’ measure?
In the view of Privacy First, the introduction of the corona pass will lead merely to an impractical burden on entrepreneurs, innumerable deficiencies and destruction of capital for society. Privacy First therefore requests that the members of the House of Representatives block the introduction of the corona pass. Failing to do so, Privacy First reserves the right to have the legislation introducing the corona pass reviewed against international and European law and declared inoperative by the courts. Preparations for such legal proceedings by us and many others are already underway.
Privacy First Foundation
 See National Privacy Conference 28 January 2021, https://youtu.be/asEX1jy4Tv0?t=9378, starting at 2h 36 min 18 sec.
 See Council of Europe, Parliamentary Assembly, Resolution 2361 (2021): Covid-19 vaccines: ethical, legal and practical considerations, https://pace.coe.int/en/files/29004/html, par. 7.3.1-7.3.2: ‘‘Ensure that citizens are informed that the vaccination is NOT mandatory and that no one is politically, socially, or otherwise pressured to get themselves vaccinated, if they do not wish to do so themselves; ensure that no one is discriminated against for not having been vaccinated, due to possible health risks or not wanting to be vaccinated.’’ See also, inter alia, Dutch House of Representatives, Motion by Member Azarkan on no corona vaccination requirement (28 October 2020), House of Representatives, 25295-676, https://zoek.officielebekendmakingen.nl/kst-25295-676.html: ‘‘The House of Representatives (...) expresses that there should never be a direct or indirect corona vaccination obligation in the future’’; Motion by Member Azarkan on access to public benefits for all regardless of vaccination or testing status (5 January 2021), House of Representatives 25295-864, https://zoek.officielebekendmakingen.nl/kst-25295-864.html: "The House of Representatives (...) requests the government to allow access to public benefits for all regardless of vaccination or testing status."
An earlier, similar version of this commentary appeared as early as March 2021: https://www.privacyfirst.eu/focus-areas/law-and-politics/695-privacy-first-position-concerning-the-dutch-draft-bill-on-covid-19-test-certificates.html.
The hearing at the court of appeal in The Hague in the proceedings of Privacy First against the register for Ultimate Beneficial Owners (UBO) is scheduled for Monday, 27 September 2021.
Following the very critical advice of the European Data Protection Supervisor (EDPS), the district court of The Hague confirmed on 18 March 2021 that there is every reason to doubt the validity of the European money laundering directives that form the basis for the UBO register. The judge ruled that it cannot be excluded that the highest European court, the Court of Justice of the EU (CJEU), will conclude that the public nature of the UBO register is not in line with the principle of proportionality. Since a Luxembourg local court has already refered questions about this to the CJEU, the Dutch court in summary proceedings did not find it necessary to ask questions about it as well. Privacy First has appealed the judgment in these summary proceedings, taking the case to the court of appeal of The Hague. Our appeal summons can be found here (pdf in Dutch).
Privacy First requests the court of appeal to ask preliminary questions on the UBO register to the European Court of Justice and calls for the suspension of the operation of the UBO register until these questions have been answered. Privacy First also asks the court to temporarily suspend the public accessibility of the UBO register, at least until the CJEU has ruled on this matter. The court of appeal's ruling is expected a few weeks after the hearing on 27 September 2021.
‘‘The UBO register will put privacy-sensitive data of millions of people up for grabs’’, Privacy First’s attorney Otto Volgenant of Boekx Attorneys comments. ‘‘There are doubts from all sides whether this is an effective tool in the fight against money laundering and terrorism financing. It’s like using a sledgehammer to crack a nut. The Court of Justice of the EU will ultimately rule on this. I expect that it will annul the UBO register – at least its public accessibility. Until then, I advise UBOs not to submit any data to the UBO register. Once data have been made public, they cannot be retrieved.’’
Background of the lawsuit against the UBO register
Privacy First is bringing a lawsuit against the Dutch government regarding the UBO Register which was introduced in 2020. In summary proceedings, the invalidity of the EU regulations on which the UBO register is based are being invoked. The consequences of this new legislation are far-reaching. After all, it concerns very privacy-sensitive information. Data about the financial situation of natural persons will be out in the open. More than 1.5 million legal entities in the Netherlands that are listed in the Dutch Trade Register will have to disclose information about their ultimate beneficial owners. The UBO register is accessible to everyone, for €2.50 per retrieval. This level of public accessibility is not proportionate.
On 24 June 2020, the Dutch ‘Implementation Act on Registration of Ultimate Beneficial Owners of Companies and Other Legal Entities’ entered into force. Based on this new Act, a new UBO register linked to the Trade Register of the Netherlands Chamber of Commerce will contain information on all ultimate beneficial owners of companies and other legal entities incorporated in the Netherlands. This information must indicate the interest of the UBO, i.e. 25-50%, 50-75% or more than 75%. In any case, the UBO’s name, month and year of birth as well as nationality will be publicly available for everyone to consult, with all the privacy risks this entails.
Since 27 September 2020, newly established entities must register their UBO in the UBO Register. Existing legal entities have until March 27 2022 to register their UBOs. The law gives only very limited options for shielding information. This is only possible for persons secured by the police, for minors and for those under guardianship. The result will be that the interests of almost all UBOs will become public knowledge.
European Anti-Money Laundering Directive
This new law stems from the Fifth European Anti-Money Laundering Directive, which requires EU Member States to register and disclose to the public the personal data of UBOs. The aim of this is to combat money laundering and terrorist financing. According to the European legislator, the registration and subsequent disclosure of personal data of UBOs, including the interest that the UBO has in a company, contributes to that objective. The public nature of the register would have a deterrent effect on persons wishing to launder money or finance terrorism. But the effectiveness of a UBO register in the fight against money laundering and terrorism has never been substantiated.
Massive privacy violation and fundamental criticism
The question is whether the means does not defeat the purpose. Registering the personal data of all UBOs and making it accessible to everyone is a blanket measure of a preventive nature. 99.99% of all UBOs have nothing to do with money laundering or terrorist financing. If it was in fact proportionate to collect information on UBOs, it should be sufficient if that information is available to those government agencies involved in combating money laundering and terrorism. Making the information completely public is going too far. The European Data Protection Supervisor already ruled that this privacy violation is not proportionate. But this opinion has not led to an amendment of the European directive.
Leading up to the the debate on this law in the Dutch House of Representatives, fundamental criticism came from various quarters. The business community agitated because it feared – and now experiences – an increase in burdens and perceives privacy risks. UBOs of family-owned companies that have remained out of the public eye up until now are running major privacy and security risks. There was also a great deal of attention for the position of parties that attach great importance to the protection of data subjects, such as church communities and social organizations. As for associations and foundations that do not have owners, things are cumbersome: they have to put the data that is already in the Trade Register in another register. Unfortunately, this has not led to any changes in the regulations.
Dutch investigative journalism platform Follow the Money looked into the social costs of the Dutch UBO register. Follow the Money writes: ‘‘The UBO register entails costs, hassle and sometimes slightly absurd bureaucracy for millions of entrepreneurs and directors. The Ministry of Finance reckons the total costs of the register for the business community is 99 million Euros. Another 9 million Euros must be added for one-time implementation costs. When lawyer Volgenant hears about this amount, he reacts with dismay: 'The total costs are much higher than I thought! If you extrapolate that to the whole EU, the costs are astronomical.’’’
Favourable outcome of lawsuit is likely
Privacy First has initiated a lawsuit against the UBO register for violation of the fundamental right to privacy and the protection of personal data. Privacy First requests the Dutch judiciary to render the UBO register inoperative in the short term and to submit preliminary questions on this subject to the Court of Justice of the European Union. It would not be the first time privacy-violating regulations are repealed by the courts, something that previous Privacy First lawsuits attest to.
The Dutch law and also the underlying European directive are in conflict with the European Charter of Fundamental Rights as well as the General Data Protection Regulation. The legislator has created these regulations, but it is up to the courts to conduct a thorough review of them. Ultimately the judge will have the final say. If the (European) legislator does not pay enough attention to the protection of fundamental rights, then the (European) judge can cast the regulations aside. The Court of Justice of the European Union has previously declared regulations invalid due to privacy violations, for example the Telecom Data Protection Directive and the Privacy Shield. The Dutch courts also regularly invalidate privacy-invading regulations. Privacy First has previously successfully challenged the validity of legislation, for example in the proceedings about the Telecommunications Data Retention Act and in the proceedings against SyRI. Viewed against this background, the lawsuit against the UBO register is considered very promising.
Update 27 September 2021: this afternoon the court session took place in The Hague; click HERE for the pleading of our lawyer (pdf in Dutch). The judgment of the court of appeal is scheduled for 16 November 2021.
It is with great concern that Privacy First has taken note of the Dutch draft bill on COVID-19 test certificates. Under this bill, a negative COVID-19 test certificate will become mandatory for access to sporting and youth activities, all sorts of events and public places including bars and restaurants and cultural and higher education institutions, Those who have no such certificates risk getting high fines. This will put pressure on everyone's right to privacy.
Serious violation of fundamental rights
The draft bill severely infringes numerous fundamental and human rights, including the right to privacy, physical integrity and freedom of movement in combination with other relevant human rights such as the right to participate in cultural life, the right to education and various children’s rights such as the right to recreation. Any curtailment of these rights must be strictly necessary, proportionate and effective. However, the current draft bill fails to demonstrate this, while the required necessity in the public interest is simply assumed. More privacy-friendly alternatives to reopen and normalize society do not seem to have been considered. For these reasons alone, the proposal cannot pass the human rights test and should therefore be withdrawn.
The proposal also violates the general prohibition of discrimination, as it introduces a broad social distinction based on medical status. This puts pressure on social life and may lead to large-scale inequality, stigmatization, social segregation and even possible tensions, as large groups in society will not (or not systematically) want to or will not be able to get tested (for various reasons). During the recent Dutch National Privacy Conference organized by Privacy First and the Platform for the Information Society (ECP), it already became clear that the introduction of a mandatory ‘corona passport’ could have a socially disruptive effect. On that occasion the Dutch Data Protection Authority, among others, took a strong stand against it. Such social risks apply all the more strongly to the indirect vaccination obligation that follows on from the corona test certificate. In this regard, Privacy First wants to recall that recently both the Dutch House of Representatives and the Parliamentary Assembly of the Council of Europe have expressed their opposition to a direct or indirect vaccination requirement. In addition, the draft bill under consideration will have the potential to set precedents for other medical conditions and other sectors of society, putting pressure on a much broader range of socio-economic rights. For all of these reasons, Privacy First strongly recommends that the Dutch government withdraw this draft bill.
Multiple privacy violations
Moreover, from the perspective of the right to privacy, a number of specific objections and questions apply. First of all, the draft bill introduces a mandatory ‘proof of healthiness’ for participation in a large part of social life, in flagrant violation of the right to privacy and the protection of personal data. Also, the draft bill introduces an identification requirement at the entrance of public places, in violation of the right to anonymity in public spaces. The bill also results in the inconsistent application of existing legislation to the same act, namely testing, with far-reaching consequences on the one hand for a precious achievement like medical confidentiality and the trust of citizens in that confidentiality, and on the other hand for the practical implementation of retention periods while the processing of the test result does not change. After all, it is not the result of the test that should determine whether the file falls under the Dutch Medical Treatment Contracts Act (WGBO, which has a medical secrecy requirement and a retention period of 20 years) or under the Public Health Act (with a retention period of five years), but the act of testing itself. Moreover, it is unclear why the current draft bill seeks to connect to the Public Health Act and/or WGBO if it only concerns obtaining a test certificate for the purpose of participating in society (and therefore no medical treatment or public health task for that purpose). Here, the only possibility for processing and for breaching medical confidentiality should be the basis of consent. In this case, however, there cannot be the legally required freely given consent, since testing will be a compelling condition for participation in society.
Privacy requires clarity
Many other issues are still unclear: which data will be stored, where, by whom, and which data may possibly be exchanged? To what extent will there be personal localization and identification as opposed to occasional verification and authentication? Why may test results be kept for an unnecessarily long time (five or even 20 years)? How great are the risks of hacking, data breaches, fraud and forgery? To what extent will there be decentralized, privacy-friendly technology, privacy by design, open source software, data minimization and anonymization? Will test certificates remain free of charge and to what extent will privacy-friendly diversity and choice in testing applications be possible? Is work already underway to introduce an ‘alternative digital carrier’ in place of the Dutch CoronaCheck app, namely a chip, with all the risks that entails? How will function creep and profiling be prevented and are there any arrangements when it comes to data protection supervision? Will non-digital, paper alternatives always remain available? What will happen to the test material taken, i.e. everyone’s DNA? And when will the corona test certificates be abolished?
As long as such concerns and questions remain unanswered, submission of this bill makes no sense at all and the corona test certificate will only lead to the destruction of social capital. Privacy First therefore reiterates its request that the current proposal be withdrawn and not submitted to Parliament. Failing this, Privacy First will reserve the right to have the matter reviewed by the courts and declared unlawful.
 See the Dutch National Privacy Conference, 28 January 2021, https://youtu.be/asEX1jy4Tv0?t=9378, starting at 2h 36 min 18 sec.
 See Council of Europe, Parliamentary Assembly, Resolution 2361 (2021): Covid-19 vaccines: ethical, legal and practical considerations, https://pace.coe.int/en/files/29004/html, par. 7.3.1-7.3.2: “Ensure that citizens are informed that the vaccination is NOT mandatory and that no one is politically, socially, or otherwise pressured to get themselves vaccinated, if they do not wish to do so themselves; ensure that no one is discriminated against for not having been vaccinated, due to possible health risks or not wanting to be vaccinated.” See also, for example, Dutch House of Representatives, Motion by Member Azarkan on No Corona Vaccination Obligation (28 October 2020), Parliamentary Document 25295-676, https://zoek.officielebekendmakingen.nl/kst-25295-676.html: "The House (...) pronounces that there should never be a direct or indirect coronavirus vaccination obligation in the future"; Motion by Member Azarkan on Access to Public Benefits for All Regardless of Vaccination or Testing Status (5 January 2021), Parliamentary Document 25295-864, https://zoek.officielebekendmakingen.nl/kst-25295-864.html: "The House (...) requests the government to enable access to public services for all regardless of vaccination or testing status.’
Under the Corona Pandemic Emergency Act, the Dutch government has the option to introduce all kinds of restrictive measures, including the wide-ranging and mandatory use of face masks. This is unless the Dutch House of Representatives rejects this measure later this week. In this context, Privacy First today has sent the following email to the House of Representatives:
Dear Members of Parliament,
On 19 November, the government submitted to you the Regulation concerning additional requirements for face masks under COVID-19. Under this regulation, wearing a face mask will become mandatory in numerous places (including shops, railway stations, airports and schools) as of 1 December 2020. This obligation can be periodically extended by the government without the consent of Parliament. Based on the Corona Pandemic Emergency Act, you currently have seven days to exercise your right of veto and prevent the entry into force of a wide-ranging face mask obligation. By 26 November at the latest, you will be able to vote on this issue and reject this measure.
The wearing of face masks has been the subject of much public debate for months. Both the government and the National Institute for Public Health and the Environment (RIVM) have repeatedly stated that wearing non-medical face masks is hardly effective in combating the coronavirus. Scientists seem to be divided on this. At the same time, wearing a face mask can also have the opposite effect, i.e. harm people's health. There is a consensus, however, that in a legal sense the compulsory use of face masks is an infringement of the right to privacy and self-determination.
This accordingly falls within the scope of Privacy First. The right to privacy is a universal human right that is protected in the Netherlands by international and European treaties and by our national Constitution. Any infringement of the right to privacy must therefore be strictly necessary, proportionate and effective. If that is not the case, it is an unjustified breach and therefore a violation of the right to privacy, both as a human right and as a constitutional right. As long as the wearing of non-medical face masks to deafeat the coronavirus has not proven effective and can even have adverse health effects, there cannot be any social necessity for the introduction of a general face mask obligation. Such an obligation would thus amount to a social experiment with unforeseen consequences. This is not in keeping with a free and democratic constitutional society under the rule of law. Privacy First therefore advises you to reject the proposed regulation for the introduction of compulsory face masks and instead propose to continue wearing them on a voluntary basis.
The Privacy First Foundation
In the fight against the coronavirus, the Dutch government this week made clear that the introduction of a curfew is imminent. Because of this, Privacy First today has sent the following appeal to the Dutch House of Representatives:
Dear Members of Parliament,
This week the Netherlands finds itself at a historical human rights crossroads: is a nation-wide curfew going to be introduced for the first time since World War II? For Privacy First such a far-reaching, generic measure would be disproportionate and far from necessary in virtually every situation. Moreover, in the fight against the coronavirus the effectiveness of such a measure remains unknown to this date. For that alone, there can be no legally required social necessity of a curfew. A curfew could in fact also be counterproductive, as it would harm the mental and (therefore also) physical health of large groups in society. Besides, a curfew in the Netherlands is yet another step towards a surveillance society. The use of lighter, targeted and more effective measures is always preferable. Should a curfew nonetheless be introduced, Privacy First would consider it a massive violation of the right to privacy and freedom of movement. Privacy First therefore calls on you to not let this happen and to thwart the introduction of a curfew.
The Privacy First Foundation
Update 17 February 2021: this week, in summary proceedings, the district court of The Hague handed down a ground-breaking ruling that says that the curfew was wrongly introduced under the Dutch Extraordinary Powers Act. The current Dutch curfew is therefore unlawful. Moreover, the court found that there are "major question marks regarding the factual substantiation by the State of the necessity of the curfew. (...) Before a far-reaching restriction such as a curfew is introduced, it must be clear that no other, less far-reaching measures are available and that the introduction of the curfew will actually have a substantial effect", stated the court, without the conviction that this was the case. In addition, the court raised the question of why an urgent (but voluntary) curfew advice had not been chosen. The court also noted that "the Dutch Outbreak Management Team, according to the team itself, has no evidence that the curfew will make a substantial contribution to reducing the spread of the virus." All this "makes the State's assertion that a curfew is inevitable at least debatable and without convincing justification", the court concluded. (See judgment (in Dutch), paragraphs 4.12-4.14.)
The judgment of the district court of The Hague is in line with Privacy First’s earlier position. Privacy First hopes that this will be confirmed on appeal by the Hague Court of Appeal and that it will also lead to the rejection of the curfew by both the Dutch House of Representatives and the Senate.
A Dutch court has today handed down a judgment in preliminary injunction proceedings brought by Privacy First concerning the UBO register. The district court of The Hague confirmed that there is every reason to doubt the legality of the European money laundering directives which are the foundation of the UBO register. On this point the judge follows the very critical opinion of the European Data Protection Supervisor. The interim proceedings court rules that it cannot be excluded that the Court of Justice of the European Union (CJEU) will come to the conclusion that the public character of the UBO register is at odds with the proportionality principle. Questions over its legality were recently referred to the CJEU by a Luxembourg national court. As such, the Dutch court felt there is no need to do the same.
Privacy First had also requested a temporary deactivation of the UBO register. This, however, is a step too far for the court, which states that deactivating the register is not possible as long as the underlying EU guideline is still in force. It would put the Netherlands in a position in which it operates in violation of the European guideline. With this claim, the judge says, Privacy First is getting ahead of itself. Privacy First will examine the ruling on this point, also in view of possibly going into appeal.
‘The introduction of the UBO register would mean that privacy-sensitive data of millions of people will be up for grabs’, comments Privacy First’s attorney Otto Volgenant of Boekx Attorneys.’On all sides there are strong doubts whether this is actually an effective means in the fight against money laundering and terrorism. It’s like using a sledgehammer to crack a nut. The Court of Justice of the European Union will eventually adjudicate the case, and I expect it will annul the UBO register.’
At the start of this year, the Privacy First Foundation initiated fundamental legal action against the Dutch government on account of the new UBO register, which is linked to the Trade Register of the Dutch Chamber of Commerce. Under the law the UBO register is based on, all 1.5 million Dutch legal entities that are included in the Trade Register will have to make public all sorts of privacy-sensitive data about their Ultimate Beneficial Owners. This concerns personal data of millions of directors, shareholders and high executives of companies (including family businesses), foundations, associations, churches, social organizations, charities, etc. Privacy First deems that this is a massive privacy violation, one which also creates personal safety risks. That is why Privacy First has asked the court to immediately declare the UBO register unlawful. A lot of information in the register will be publicly available and can be requested by anyone. In Privacy First’s opinion this is completely disproportionate and an infringement of European privacy law. The CJEU will examine whether the European legislation on which the UBO register is based violates the fundamental right to privacy.
The ruling (in Dutch) by the interim proceedings court can be found here: http://deeplink.rechtspraak.nl/uitspraak?id=ECLI:NL:RBDHA:2021:2457.
Update 15 April 2021: yesterday Privacy First filed an urgent appeal against the entire judgment with the Court of Appeal of The Hague. The appeal subpoena can be found HERE (pdf in Dutch). Privacy First requests the Court, inter alia, to ask preliminary questions about the UBO register to the European Court of Justice and to suspend the UBO register until these questions are answered. In view of the major interests at stake, Privacy First hopes that the Court of Appeal of The Hague will hear this case as soon as possible.
Update 17 August 2021: the court hearing in the urgent appeal of Privacy First against the judgment will take place on Monday 27 September at the Court of Appeal in The Hague.