In this news update, I share a recent positive development. It’s a technical issue, but also an important and—at least in my view—quite interesting one.
In a nutshell: for now, there is no longer any need to file information on the Czech Register of Beneficial Owners.
For the longer explanation, please read on.
European AML laws originally required member states such as the Czech Republic to establish registers of beneficial ownership and also to make them available to any member of the public. The Czech legislator implemented this rule in section 14 of Act No. 37/2021 Coll. The Act on the Registration of Beneficial Owners (ZESM).
I was never a big fan of this requirement for public disclosure. In the context of GDPR and so many other legal protections of personal data, it seemed intuitively wrong that there was a law on the books which required the public distribution of such sensitive data. There is a legitimate public interest in the state holding this data. But I cannot think of any justification for allowing my neighbour to look me up online and see sensitive data including my date of birth and assets.
Therefore, I was not surprised when, in 2022, the European Court of Justice ruled that such a broad disclosure of beneficial ownership data interferes with the right to protection of private and family life and the right to the protection of personal data, guaranteed by Articles 7 and 8 of the Charter of Fundamental Rights of the EU. The court declared the relevant rule of the AML Directive invalid.
Most EU member states reacted quite quickly by taking their registers of beneficial ownership offline.
In contrast, the Czech state did nothing at all.
This created a weird situation in which failure to file data on the register was a breach of Czech law, but if you did file it, because you knew that it would then be made public, that would be a breach of EU privacy rights. In the words of Eleanor Roosevelt, “You’ll be damned if you do, and damned if you don’t”
However, the Czech Supreme Court, in its resolution file no. 27 Cdo 1368/2024, dated 25 August 2025, has come to our rescue. The court confirmed that the ZESM is contrary to European Union law, in the part in which it allows access to the register by the general public.
The court also ruled that until this defect is fixed, the state may not enforce the obligation to record and maintain up-to-date information on the beneficial owners of legal entities and trusts (Section 9(1) of the ZESM).
So for now, Czech beneficial registration rules are effectively ‘on hold’. The court judgment suggests that you can continue to comply if you like, but if you do not, then there will be no negative consequences.
It will be interesting to see what happens next.
Photo Credit: European Court of Justice.