The Supreme Administrative Court (“SAC“) has recently heard several disputes concerning the obligation to register relevant information in the Register of Ultimate Beneficial Owners (the “UBO Register“) according to Act No. 37/2021 Coll., on the Register of Beneficial Owners (the “UBO Act“). The rulings are significant, if not groundbreaking. But what exactly do they concern?

The essence of the two disputes was whether a company can be sanctioned for failing to register relevant information in the UBO Register, given that Czech law still allows the general public anonymous access to sensitive data on beneficial owners. In both cases (File No. 4 As 219/2024 and File No. 5 As 1/2025), the companies were faced with a choice: either violate the statutory obligation to register relevant information in the UBO Register or interfere with the constitutionally guaranteed rights to privacy of their beneficial owners. The companies refused to register relevant information in the UBO Register, arguing that compliance with this obligation constituted a disproportionate interference with the constitutionally guaranteed right to privacy of their beneficial owners, due to the unrestricted access of the general public to the registered data.

The SAC stated that Czech administrative authorities and courts must also respect the conclusions of the Court of Justice of the EU when applying the UBO Act. The Court of Justice of the EU already ruled in 2022 in the WM and Sovim decisions (C-601/20 and C-37/20) that the previously established unrestricted access to registered data on beneficial owners constitutes an unacceptable interference with their rights to privacy and personal data protection. The result of this decision was the immediate closure of national registers of beneficial owners (e.g. in Luxembourg) and greater restrictions on public access to this data in other EU countries. Unfortunately, no legislative changes have been made in the Czech Republic.

The court thus concluded that companies that refused to register the relevant information in the UBO Register precisely because they would unproportionally interfere with the rights of their beneficial owners cannot be sanctioned. According to the SAC, the Ministry of Justice did not act correctly when it insisted on unconditional compliance with the obligation without reflecting the conclusions of the WM and Sovim decisions.

Both SAC rulings emphasize the importance of the principle of proportionality: the pursuit of transparency is legitimate, but it must not cross the line into disproportionate interference with privacy. In several EU Member States, access to the register of beneficial owners has been restricted to persons who can demonstrate a legitimate interest. The SAC rulings clearly demonstrate that a balance must be maintained between the public interest and the fundamental rights of individuals (e.g. the right to privacy and the protection of personal data).

Based on these SAC rulings, we can finally expect a response to the conclusions of the Court of Justice of the EU and the SAC in the form of legislative changes, likely consisting of limited access to the UBO Register.

For the sake of completeness, we would like to add that in mid-2027, a new Regulation (EU) 2024/1624 of the European Parliament and of the Council of 31 May 2024 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing will come into effect, which will essentially bring uniform EU regulation to both AML issues and the agenda of beneficial ownership registration.

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If you would like further information or assistance with the registration of ultimate beneficial owners of your corporation, please get in touch with your contact person in our office or Jiří Absolon or Martin Jonek.

This document is a general communication and should not be regarded as legal advice on any specific matter.