MODELS AND METHODS IN MODERN SCIENCE
International scientific-online conference
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LEGAL REGIME OF BENEFICIAL OWNERSHIP IN CIVIL LAW
SYSTEMS
Raximova Dilorom Xaitbayevna
Teacher at Tashkent State Law University,
independent researcher
e-mail: raximovadilorom97@gmail.ru
https://doi.org/10.5281/zenodo.16525342
Annotation:
This article examines the legal regime governing beneficial
ownership within civil law jurisdictions, analyzing how these systems
conceptualize, regulate, and implement beneficial ownership transparency
requirements. Unlike common law systems that rely on trust structures and
equitable ownership concepts, civil law jurisdictions have developed distinct
approaches to beneficial ownership that reflect their codified legal traditions
and emphasis on direct ownership rights. The study explores the evolution of
beneficial ownership regimes across major civil law countries including France,
Germany, Italy, and Spain, examining their implementation of European Union
directives and international standards. The research demonstrates that while
civil law systems initially lacked comprehensive beneficial ownership
frameworks due to their limited recognition of trust structures, recent
regulatory developments driven by anti-money laundering initiatives and
Financial Action Task Force (FATF) recommendations have led to sophisticated
beneficial ownership disclosure regimes. The article concludes that civil law
systems are successfully adapting their legal frameworks to accommodate
beneficial ownership transparency while maintaining their fundamental
principles of codified law and direct ownership structures.
Keywords:
Beneficial ownership, civil law systems, anti-money laundering,
corporate transparency, ultimate beneficial ownership, legal entity customers
This article examines the legal regime governing beneficial ownership
within civil law jurisdictions, analyzing how these systems conceptualize,
regulate, and implement beneficial ownership transparency requirements.
Unlike common law systems that rely on trust structures and equitable
ownership concepts, civil law jurisdictions have developed distinct approaches
to beneficial ownership that reflect their codified legal traditions and emphasis
on direct ownership rights. The study explores the evolution of beneficial
ownership regimes across major civil law countries including France, Germany,
Italy, and Spain, examining their implementation of European Union directives
and international standards. The research demonstrates that while civil law
systems initially lacked comprehensive beneficial ownership frameworks due to
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their limited recognition of trust structures, recent regulatory developments
driven by anti-money laundering initiatives and Financial Action Task Force
(FATF) recommendations have led to sophisticated beneficial ownership
disclosure regimes. The article concludes that civil law systems are successfully
adapting their legal frameworks to accommodate beneficial ownership
transparency while maintaining their fundamental principles of codified law and
direct ownership structures.
The development of beneficial ownership concepts in civil law systems
represents a departure from traditional civilian legal theory, which emphasizes
direct ownership and formal legal relationships. Classical civil law systems,
derived from Roman law principles and codified in comprehensive legal codes,
traditionally recognized ownership as a unified concept where legal title and
beneficial enjoyment coincided. This contrasted sharply with common law
systems, where the separation of legal and equitable ownership through trust
structures had been recognized for centuries.
The need for beneficial ownership frameworks in civil law systems
emerged from practical necessities rather than theoretical developments. The
rise of complex corporate structures, international financial flows, and
sophisticated money laundering schemes revealed vulnerabilities in traditional
civil law approaches to ownership identification. Criminal organizations and
corrupt individuals exploited the formalistic nature of civil law ownership
concepts by creating layers of legal entities that obscured the identity of true
controllers while remaining technically compliant with existing laws.
International pressure from organizations such as the FATF, the
Organization for Economic Cooperation and Development (OECD), and the
European Union accelerated the development of beneficial ownership
frameworks in civil law jurisdictions. These organizations recognized that
effective anti-money laundering and counter-terrorism financing required
transparency regarding the natural persons behind corporate structures,
regardless of the underlying legal system's traditional approaches to ownership.
The adaptation of beneficial ownership concepts to civil law systems
required careful consideration of fundamental civilian legal principles. Unlike
common law systems, where equity developed as a parallel system to address
inadequacies in legal ownership concepts, civil law systems needed to
incorporate beneficial ownership within their existing codified frameworks.
Civil law theorists and practitioners developed approaches that
distinguished between formal legal ownership (propriété juridique) and
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substantive economic control or benefit (contrôle économique or bénéfice
économique). This distinction allowed civil law systems to maintain their
emphasis on codified relationships while recognizing the practical reality that
legal owners might not be the true controllers or beneficiaries of corporate
entities.
The concept of "ultimate beneficial ownership" (UBO) became particularly
important in civil law systems as it provided a framework for looking beyond
formal ownership structures to identify natural persons who ultimately control
or benefit from legal entities. This approach aligned with civil law systems'
preference for clear, definitive rules while addressing the transparency concerns
that drove international beneficial ownership initiatives.
Civil law systems integrated beneficial ownership requirements through
various mechanisms that respected their codified traditions while achieving
transparency objectives. Legislative codification became the primary method,
with countries enacting specific statutes or amending existing corporate and
commercial codes to include beneficial ownership disclosure requirements²².
Administrative implementation through regulatory agencies provided
flexibility within the codified framework, allowing civil law systems to develop
detailed procedures and requirements while maintaining legislative oversight.
This approach proved particularly effective in countries like Germany and
France, where administrative law plays a significant role in implementing
statutory requirements.
International treaty incorporation allowed civil law systems to implement
beneficial ownership requirements as part of their international obligations,
providing legal basis for requirements that might otherwise conflict with
traditional ownership concepts. The European Union's directives provided a
particularly important framework for harmonizing beneficial ownership
requirements across civil law member states. Germany's federal structure has
created a complex but comprehensive approach to beneficial ownership
regulation that reflects both its civil law traditions and its federal constitutional
framework.
The German beneficial ownership register (Transparenzregister) was
established under federal law but implemented through the Länder (federal
states), creating multiple layers of oversight and administration.
German law adopts a relatively low threshold for beneficial ownership,
defining beneficial owners as natural persons who directly or indirectly hold
more than 25% of the capital or voting rights, or who otherwise control the
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entity. However, German implementation faced significant privacy concerns, and
following the EU Court of Justice decision, Germany restricted public access to
beneficial ownership information.
The German approach illustrates how federal civil law systems can
implement beneficial ownership requirements while respecting both
constitutional limitations and international obligations. The integration of
beneficial ownership requirements with Germany's existing commercial register
system (Handelsregister) demonstrates the civilian preference for systematic,
integrated approaches to legal regulation.
Germany's federal structure has created a complex but comprehensive
approach to beneficial ownership regulation that reflects both its civil law
traditions and its federal constitutional framework. The German beneficial
ownership register (Transparenzregister) was established under federal law but
implemented through the Länder (federal states), creating multiple layers of
oversight and administration.
The development of beneficial ownership regimes in civil law systems
represents a remarkable adaptation of legal frameworks that traditionally
emphasized formal, direct ownership relationships. Through innovative
regulatory approaches, comprehensive legislative frameworks, and
sophisticated administrative implementation, civil law jurisdictions have
successfully integrated beneficial ownership transparency requirements while
maintaining their fundamental characteristics and systematic approaches to
legal regulation.
The comparative analysis reveals that civil law systems have developed
diverse but effective approaches to beneficial ownership regulation, each
reflecting national legal traditions while meeting international standards. The
European Union's coordinating role has been particularly important, providing
common standards while allowing flexibility for national implementation that
respects different civilian legal traditions
References:
1.See generally Austin W. Scott, William F. Fratcher & Mark L. Ascher, Scott and
Ascher on Trusts § 1.1 (5th ed. 2006).
2.Financial Action Task Force, Guidance on Beneficial Ownership of Legal
Persons
(March
2023),
https://www.fatf-
gafi.org/en/publications/Fatfrecommendations/Guidance-Beneficial-
Ownership-Legal-Persons.html.
3.Financial Action Task Force, Transparency and Beneficial Ownership, FATF
Guidance 12 (Oct. 2014).
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4.John Henry Merryman & Rogelio Pérez-Perdomo, The Civil Law Tradition: An
Introduction to the Legal Systems of Europe and Latin America 1-4 (4th ed.
2018).
