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The Year in Review

International Legal Developments Year in Review: 2022

Europe - International Legal Developments Year in Review: 2022

Luigi M Pavanello and Willem den Hertog


  • This article discusses significant legal developments in European Law from 2022.
  • The European Court of Justice explains the meaning of the word 'decision' under EU Regulation 2201/2003.
  • The Dutch government has started establishing the Ultimate Beneficial Owner of companies (UBO) Register, which is required under Article 30 of the 4th EU Anti-Money Laundering Directive (the Directive)
Europe  - International Legal Developments Year in Review: 2022
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This Article discusses significant legal developments in European Law from 2022.

I. Italy

A. The European Court of Justice Explains the Meaning of the Word “Decision” under EU Regulation 2201/2003

Case C-646/20, which was published on November 15, 2022, addressed the interpretation of Council Regulation (EC) no. 2201/2003 (Regulation 2201/2003). Regulation 2201/2003, dated November 27, 2003, concerns jurisdiction and the recognition and enforcement of judgments in matrimonial and parental responsibility matters and matters of parental responsibility. In its decision, the European Court of Justice set an important and fundamental precedent with respect to when an out-of-court divorce decree—specifically, that an out-of-court divorce decree constitutes a judgment under Regulation (EC) no. 1347/2000 (Regulation Brussels II-bis).

The case involved a controversy between the Senatsverwaltung für Inneres und Sport, Standesamtsaufsicht (the Berlin Interior and Sport Department, which is in charge of overseeing and keeping the marital status register) and a German-Italian citizen. The Berlin Interior and Sport Department refused to acknowledge and file the German citizen’s marital status and would not register the divorce between the German-Italian citizen and his Italian wife obtained in Italy through the City of Parma’s Ufficiale di Stato Civile (Marital Status Registrar) without the previous exequatur and recognition of the divorce by the competent German Court.

The facts of the case are simple: a German-Italian citizen married an Italian citizen in Berlin in 2013. In 2017, the couple appeared before the City of Parma’s Marital Status Registrar to have their marriage dissolved pursuant to Italian law. Under Italian law, a couple may dissolve their marriage without the need for court proceedings before the local Marital Status Registrar if the following conditions are met: (1) There are no minor children, no disabled or seriously handicapped children, or no children that are not financially self-supporting; and (2) their will is freely expressed. After having obtained the divorce, one of the spouses sought to have the divorce registered in Berlin. But local German authorities refused to register the divorce on the grounds that it had not yet been recognized by a German court. After an appeal, the matter was brought before the locally-competent German Federal Court, which raised the following question to the European Court of Justice: Does the term “decision” as used in the Regulation Brussels II-bis regarding the recognition of a divorce include the divorce granted by a Marital Status Registrar of a Member State deriving from an agreement between the spouses and executed in accordance with the laws of such Member State?

The European Court of Justice, sitting in the Grand Chamber composition, decided that the divorce decision issued by the Italian Marital Status Registrar, in accordance with the laws of Italy, was a “decision” in accordance with the Regulation Brussels II-bis, and it only concerned the dissolution of the marriage without any legal consequences on spousal maintenance, child support, or division of assets, and without the involvement of any minor or financially dependent offspring.

Thus, according to the European Court of Justice, any divorce decision, whether issued by a court or out of court by an authority so empowered by the laws of an EU Member State, is a “decision” in accordance with Regulation Brussels II-bis and must be automatically recognized in the other EU Member States, except for the limitations set forth in the Regulation.

II. Netherlands

A. Ultimate Beneficial Owner Register

As described last year, and the year before that, the Dutch government has started establishing the Ultimate Beneficial Owner of companies (UBO) Register, which is required under Article 30 of the 4th EU Anti-Money Laundering Directive (the Directive). The Dutch Act that implements the EU Directive “specifies that the UBO’s full name, month and year of birth, country of domicile and nationality, as well as the nature and extent of the UBO’s economic interest in the legal entity concerned can be accessed by any member of the public.”

The public availability of the UBO Register is seen by some people “as a serious threat to the privacy of the individuals concerned, exposing them to all kinds of unwanted attention and far worse, such as and far worse, such as potential extortion and kidnapping.” In prior litigation on this issue, the Dutch Courts refused to ask the Court of Justice of the European Union (CJEU) for a prejudicial decision because the Tribunal d’Arrondissement of Luxembourg had already done so. Since then, all eyes, or at least the Dutch and Luxembourg ones, were on the CJEU. The CJEU has now issued its decision, finding that the Directive’s provision that Member States must ensure that information on the beneficial ownership of companies and of other legal entities incorporated within their territory is accessible to any member of the general public is invalid.

The CJEU began its decision with the customary recital of the applicable E.U. and Luxembourg law, the facts of both cases, and the prejudicial questions asked. Then, the Court addressed the issue of interference with the fundamental rights guaranteed in Article 7 (protection of private and family life, home, and communications) and Article 8 (protection of personal data) of the Charter of Fundamental Rights of the European Union (the Charter) resulting from the general public’s access to information on UBOs. Given its recital of the its previous decisions, it is unsurprising that the Court found that interference exists and that, given that the free dissemination of this information can lead to serious abuse, this “constitutes a serious interference with the fundamental rights enshrined in Articles 7 and 8 of the Charter.”

The Court then analyzed whether such interference was justified. In so doing, the Court made lengthy observations on the principles involved in such justification, including: (1) legality, (2) respect for the essence of the fundamental rights involved, (3) the objective of general interest recognized by the European Union, and (4) whether the interference at issue is appropriate, necessary, and proportionate.

As to the first two principles, the Court found that the principle of legality must be considered to have been fulfilled and that the interference does not undermine the essence of the fundamental rights enshrined in Articles 7 and 8 of the Charter. As to the third principle, the Court found, on the one hand, that the stated aim of the legislation—to prevent money laundering and terrorist financing—constitutes an objective of general interest that is capable of justifying even serious interferences with the fundamental rights mentioned. On the other hand, the principle of transparency—also underlying the legislation—is not so capable because, as in this case, it does not concern transparency linked to a public institution.

It was in its treatment of the fourth principle that the Court really took a bite. Although it considered the general public’s right of access to the UBO Register information appropriate, it found that it is not strictly necessary and not at all proportional. With respect to the former, the Court pointed out that the previous Money-Laundering Directive required a “legitimate interest” for a member of the public to obtain the UBO information. The fact that the Commission had trouble defining “legitimate interest” is not a sufficient reason for the EU legislature to simply provide for unrestricted general public access to that information. The Court also found that the interference is not proportional, in part because combating money-laundering and financing of terrorism is a priority for public authorities and for entities such as banks, but that providing UBO data to individuals, given the serious risks, does not outweigh the serious drawbacks.

In sum, the CJEU declared the provisions of the Directive mandating the provision of UBO information to the general public to be invalid. Thus, all eyes are again on the European and national legislatures to see whether they will try again. This will be an area to watch in the coming year.