Beneficial ownership registration requirement re-examined by the administrative judiciary

Initially, the UBO Decree mandated that companies, recognized foundations and associations, trusts, and fiduciary mandates based in Italy fulfill their duty to report data and information on ultimate beneficial ownership by no later than December 11. (For more information, please refer to our previous article 'What's new on Beneficial Ownership'). 

However, after the appeal by several fiduciary companies that contested the inclusion of fiduciary mandates among the obligated parties, arguing that they were not legal institutions like trusts, the Lazio Regional Administrative Court (Italian TAR Lazio) intervened with a precautionary ruling, suspending the UBO Decree's operation until the merit judgment.

At the end of the trial, TAR Lazio dismissed the appeal and essentially reintroduced the obligation to register with the UBO Register. The court reached this conclusion after arguing in favor of the legitimate assimilation of fiduciary mandates to Common law trusts, both in terms of the comparability of the actual effects produced and for the purposes of anti-money-laundering legislation. 

It did not take long for the ruling to return to the halls of administrative justice. 

On May 17, 2024, the Council of State, acting as the appellate judge, accepted the precautionary request proposed by the appellants, suspended the enforceability of TAR Lazio's judgment, and postponed the discussion to the next hearing for the merit treatment, scheduled for 19 September 2024.

The judges believe that the issue presents several complexities, especially in terms of the conformity of domestic legislation with European Union law, and that suspension is necessary to prevent parties from fulfilling an obligation that may not be entirely legitimately imposed. 

Such arguments suggest that an intervention by the Court of Justice of the European Union may be anticipated before the matter is finally resolved. In any case, it is reasonable to assume that the obligation to register with the Register of Ultimate Beneficial Owners is currently suspended for all subjects targeted by the UBO Decree.