Case C-609/26, Luxembourg Business Registers II – a condition defined as itself
In 2022 the Grand Chamber told the Union legislature that beneficial ownership registers could not simply be opened to everyone. The instrument written in reply gives Member States a valve, and Luxembourg has now been asked what happens when the valve is described in a circle.
Facts
COMPANY 1 is in dispute with Luxembourg Business Registers before the Tribunal d’arrondissement de Luxembourg. Article 15 of Directive (EU) 2024/1640 — the anti-money-laundering directive that replaced the regime struck down in 2022 — permits Member States to exempt beneficial ownership information from access in “exceptional circumstances to be laid down in national law”, where access would expose the beneficial owner to a disproportionate risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation. The Luxembourg transposition defines “exceptional circumstances” by reference to that same list of risks — so the condition and its definition say the same thing. The referring court has sent three questions with several limbs, running from the emptiness of that definition through what “risk” and “disproportionate” require to whether the risk protected against is only the owner’s own. (The case name Luxembourg Business Registers II is the Court’s, and marks the sequel to Joined Cases C‑37/20 and C‑601/20.)
Questions Referred
According to the Official Journal notice, the Tribunal d’arrondissement de Luxembourg asks (the full title of Directive (EU) 2024/1640 is given once and elided thereafter):
1. The concept of ‘exceptional circumstances’
(a) Is Article 15 of Directive (EU) 2024/1640 … in so far as it makes the restriction of access to information concerning beneficial owners conditional upon ‘exceptional circumstances to be laid down in national law’, to be interpreted as allowing national law to define the concept of ‘exceptional circumstances’ simply as being equivalent to ‘disproportionate risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation’, concepts which currently constitute a condition for applying the restriction of access in accordance with the wording of the abovementioned Article 15?
(b) In the event that Question 1(a) is answered in the negative and in a situation where the transposing national law has not defined the concept of ‘exceptional circumstances’ other than by a reference to the ineffective concepts of ‘disproportionate risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation’, must Article 15 cited above be interpreted as allowing a national court to disregard the condition of ‘exceptional circumstances’, or must it make up for the national legislature’s failure by using its own authority to determine the scope of the concept of ‘exceptional circumstances’? In the latter situation, since, according to the wording of Article 15 cited above, that is a condition whose content is to be determined by national law, is it possible for the Court of Justice of the European Union to give guidance to the national court in its task? In the event of the latter question being answered in the affirmative, what guidelines should the national court follow in determining the content of the concept of ‘exceptional circumstances’?
(c) Is Article 15 … to be interpreted as meaning that the exceptional circumstances to which it refers — in which Member States may provide for exemptions from access to all or part of the information on beneficial owners, where access as provided for in Article 11 … would expose the beneficial owner to disproportionate risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation — may be found only where it is demonstrated that there is a disproportionate risk … which is exceptional, which is actually borne by the beneficial owner as an individual, and which is significant, real and present?
2. The concept of ‘risk’
Is Article 15 … in so far as it makes the restriction of access to information concerning beneficial owners conditional upon a ‘risk’, to be interpreted as meaning that the protection resulting from restriction of access is not afforded where that information, or any other information provided by the beneficial owner to demonstrate the existence and extent of the ‘risk’ faced, is easily available to third parties through other information channels?
3. The concept of ‘disproportionate risk’
(a) What competing interests must be taken into consideration in the context of applying Article 15 … in so far as it makes the restriction of access to information concerning a beneficial owner conditional upon a ‘disproportionate’ risk?
(b) Is Article 15 … in so far as it provides that ‘Member States shall ensure that such exemptions are granted on a case-by-case basis upon a detailed evaluation of the exceptional nature of the circumstances and confirmation that those disproportionate risks exist’ to be interpreted as meaning that: — the grant of a derogation necessarily presupposes a finding of concrete, specific and individualised risks established in the light of the particular circumstances of each case, or — the fact that the beneficial owner belongs to a category of persons who are particularly vulnerable is, as such, sufficient to establish the existence of disproportionate risks, without it being necessary to establish additional facts specific to the case in question?
(c) Is Article 15 … to be interpreted as meaning that: — the concept of ‘disproportionate risk’ refers exclusively to risks affecting the beneficial owner as a person, or — it may also cover risks affecting, directly or indirectly, the security of a State, in particular where the disclosure of information relating to the beneficial owner is capable of undermining essential State interests, such as national security, international relations or institutional stability, by reason of the functions performed by the beneficial owner?
Sources
OJ notice C/2026/4484 (EUR‑Lex) · Case file on CURIA · Directive (EU) 2024/1640
Comment
The first question is the one worth the reference, and it identifies a drafting failure rather than an interpretive difficulty. Article 15 sets two conditions: exceptional circumstances, and a disproportionate risk drawn from a listed set. Luxembourg’s transposition defines the first by reproducing the second. A condition defined as its own companion condition adds nothing; on that reading the exemption is available whenever the risk exists, and the word “exceptional” does no work at all.
That matters more than a tidiness point because of where Article 15 came from. In Joined Cases C‑37/20 and C‑601/20, WM and Sovim (ECLI:EU:C:2022:912) the Grand Chamber declared invalid the amendment requiring Member States to make beneficial ownership information “accessible in all cases to any member of the general public”. The replacement regime narrowed access and added a safety valve for owners at risk. If the valve opens on nothing more than the risk itself, national transpositions can make it wide; if “exceptional” is given independent content, the same word becomes the instrument that keeps registers substantially open. The Court is effectively being asked to set the pressure at which transparency yields.
Question 1(b) is unusual and rather brave. Having pointed out that its own legislature has left the condition empty, the referring court asks what it should now do: disregard the condition, or supply the content itself — and, if the latter, may the Court of Justice guide it, given that Article 15 assigns that content to national law? Courts do not often ask Luxembourg to help them repair a domestic statute. The answer will be constrained by the division of functions in Article 267, but the question is a real one wherever a directive delegates a definition and the Member State declines to write it.
The remaining limbs are practical and will decide far more cases than the abstract ones. Question 2 asks whether protection falls away when the same information is already easy to find elsewhere — a sensible instinct, though it sits awkwardly with the Court’s data-protection case law, which has repeatedly held that prior availability of information does not neutralise a fresh act of disclosure. Question 3(b) asks whether membership of a vulnerable category suffices, or whether individualised proof is always required; the directive’s own words (“case-by-case”, “detailed evaluation”) point one way, while the practicalities of protecting, say, people under threat point the other.
Question 3(c) is the one to watch. It asks whether “disproportionate risk” reaches beyond the individual to the security of the State — where disclosure of who owns what could touch national security, international relations or institutional stability “by reason of the functions performed by the beneficial owner”. That is a considerable widening of a provision drafted around personal safety, and it would give governments an interest of their own in keeping ownership hidden. Since the entire point of these registers is to reveal who stands behind corporate structures, an affirmative answer would carve out precisely the class of owner the transparency regime was built to expose.