Rise Project has shown in this article that important companies having contracts with Romanian State use bearer shares, thus obscuring the real beneficiaries (the article mainly provides an example of a company that many speculate is connected to the in power party leader).

Searching EU infringements here, I could not find any case dealing with bearer share in spite of the problems related to this practice:

deficiencies were identified in respect of availability of information on bearer shares, availability of information on foreign companies with sufficient nexus with Romania and lack of enforcement measures regarding shareholder register’s maintenance requirements for public companies.

There seem to be an EU directive related to the subject:

Bearer shares. Under the Fourth AML Directive, Member States will be required to prohibit companies from issuing bearer shares (defined as an equity wholly owned by a person/entity that holds the physical stock certificate and where the issuing firm neither registers the owner of the stock, nor does it track transfers of ownership). Current bearer shareholders will be permitted a nine-month period to exchange their bearer shares for registered shares.

Several countries abolished bearer shares such as Switzerland, UK and Ireland.

Question: why does EU not seem to force all member countries to abolish bearer shares?

3 Answers 3


Right now, the answer is that the directive is too fresh for anything to have happened just yet and we will have to see in the next few months whether the EU puts pressure on Romania to ban bearer's shares or not.

Specifically, the fourth AML directive was adopted in 2015 and the window for transposition just expired on June 26th, 2017 (cf. article 67 of the directive). Meanwhile, infringement packages are released monthly, with the last one dating from July 22nd (and usually nothing in August).

I have no idea how aggressive the Commission intends to be in enforcing this particular provision but even initiating infringement proceedings (sending a letter of formal notice) would definitely take more than a (summer) month. Typically, for a new directive, the Commission would first review implementation in all member states (so as to avoid singling one out if several have failed to comply) and look at the directive as a whole before acting. And some of the issues might be more complex than the one you identified. Also, if I am not mistaken, a letter of formal notice would not necessarily appear in the search results, only the second step would (reasoned opinion).

By comparison, one of the quickest procedures in your list of infringement proceedings for Romania concerns directive 2014/59/EU, which was adopted in May 2014, with a deadline at the end of December of the same year (a window that's shorter than usual suggesting it was considered urgent and/or relatively easy to implement). The Commission released a reasoned opinion in May 2015, six months later.

The Commission is in any case supposed to prepare a report on implementation before June 26th, 2019 which could suggest that partial implementation and delays are expected.


Per your question, there's an EU directive on the topic. It already has tasked member states to abolish bearer shares, but the directive to that effect hasn't been transposed everywhere yet.

The EU has two main legislative tools at its disposal: regulations, which apply then and there, and directives, which merely contain guidelines; member states are then required to transpose the latter in their national law in such a way that their national law conforms to what's in the directive. Put another way, regulations enforce the same standard across the union with immediate effect, while directives enforce a minimum standard to be met within a certain timeframe.

One problem with directives is that member states sometimes drag their feet when it comes to transposing their content into their national law. They do so for all sorts of reasons. Typically it's because preexisting national laws are deemed good enough already (or stronger) except in a few edge cases; for instance France was dragging its feet at one point to transpose privacy-related legalese on grounds that they had stronger laws in place for it already. (I've no idea if they've complied since.) Other times it's because the topic is divisive enough that lobbyists or local interest groups are actively opposing it. (Think food standards, food safety, food labeling, etc.) If memory serves, the only thing the EU can do when a state drags its feet is sue it into compliance.

  • This explains nothing and is somewhat patronising as the OP seems to know more about EU law than you do: Infringement proceedings (“sue it into compliance” as you put it) is precisely the tool the EU Commission can use to force compliance, the question is why it hasn't used it in this case.
    – Relaxed
    Aug 8, 2017 at 13:12

Bearer shares don't pose an immediate risk to EU financial system.

In addition, modern electronic shares clearing system doesn't allow simple Peer to Peer transfer exchange of ownership without cost. When exchange hand, many additional costs are added on top of the exchange process.

(update) For example, if someone borrows money from friends, they may give away bearer shares as collaterals. In an economic sense, this is important in financing, especially for countries without sound credit union/corporate banking system (instead of controlling by huge bank conglomerate that seek huge returns than simple financing). It is important not to throw the baby with the dirty water.

  • 2
    Bearer shares (and vehicles like nominee companies) are an issue for EU member state finances, though, in that they enable a number of EU citizens to evade taxes. Aug 8, 2017 at 11:38
  • @DenisdeBernardy Many economy practices are subject to tax evasion argument.
    – mootmoot
    Aug 8, 2017 at 12:51
  • This is not an answer: the EU already compared the positives and negatives before banning them. The question is about enforcement of the existing decision.
    – MSalters
    Aug 11, 2017 at 8:09

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