EU plans comprehensive wealth register: What you need to know

EU wants to build a comprehensive database on the assets of all citizens – what’s behind it?

As financial transparency becomes increasingly important, a significant change is on the horizon. In this article, we explain what the upcoming EU wealth register entails and what it means for us.

When will the EU wealth register be introduced?

The feasibility studies for the EU wealth register have been completed, and the EU is expected to release new information soon. Concrete plans could be presented in the coming weeks or months, followed by a legislative process that will take some time. Estimates suggest that the register could come into effect in the next one to two years, depending on how quickly the legislation progresses and the level of resistance from member states. Certain countries might prioritize financial privacy or have financial sectors that benefit from less transparency, making negotiations challenging.

What will the EU wealth register look like?

The EU wealth register is expected to be a comprehensive database that records various assets of citizens. The goal is to increase transparency and better combat money laundering and terrorism financing. Money laundering activities within the EU are estimated to be in the hundreds of billions of euros annually, according to the European Commission. Enhanced transparency measures like the wealth register aim to curb these illegal activities by making it harder for individuals to hide their assets. The exact technical and bureaucratic details will be determined in the coming months once the EU publishes the results of the feasibility studies.

What assets will be recorded in the register?

The register could record a wide range of assets, including real estate, bank accounts, securities, vehicles, and possibly even artworks or precious metals. The specific list of assets to be recorded will depend on the results of the feasibility study and subsequent legislative decisions. The aim is to provide a comprehensive overview of citizens’ wealth. This increased transparency follows the model of countries like Denmark and Sweden, which have long traditions of financial openness, leading to greater public trust and reduced financial crime.

Is it possible to circumvent the wealth register?

The register will be designed to make legal circumvention difficult, especially within the EU. Moving to Switzerland offers no security either, as it also plans to introduce a transparency register and intensify its fight against money laundering. The automatic exchange of information between countries will further complicate the hiding of assets. To avoid the register, one would have to leave Europe, which still does not guarantee complete protection.

What reasons does the EU give for introducing the wealth register?

The EU justifies the introduction of the wealth register primarily by the need to combat money laundering and terrorism financing. Tracking the assets of Russian oligarchs is also cited as a reason. However, critics fear that the register could be misused in times of crisis to use citizens’ assets to pay off debts. This concern is not unfounded, as historical examples show that wealth registers can be used for state interventions in times of crisis. The implementation of such a comprehensive database will need to ensure that citizens’ data are protected and that their rights are not infringed, adhering to the stringent data protection and privacy standards of the General Data Protection Regulation (GDPR).

The proposed EU wealth register represents a significant step towards increased financial transparency and the fight against money laundering and terrorism financing. While it promises to bring many benefits, including a better overview of citizens’ assets and enhanced financial security, it also raises important questions about privacy and state control over personal wealth. The coming months and years will be critical in shaping the final form of this register and addressing the concerns of all stakeholders involved.