Earlier this year we saw the European Parliament call for
amendments to the proposed Fourth Money Laundering Directive which
would include the establishment of a Europe wide public register of
the owners behind companies and trusts. That the register be
"public" (accessible to anyone in the EU who completes a
basic online registration) was fundamental to the parliament's
At the time, David Cameron wrote to the European Council
highlighting the key distinction between trusts and companies and
suggested that the solution to combat the potential misuse of
companies (such as a public registry) may not be suitable for wider
Unlike trusts, companies interact with the public and the
marketplace and, as such, a public register may be appropriate.
Conversely, it is difficult to see the rationale for a private
family arrangement by way of a trust or foundation being
As such, the Council of EU Member States has taken a different
stance from the parliament, by amending the proposals so as not to
include the mandatory public registers. As amended, trustees
of express trusts would have to obtain and hold information
identifying the settlor, the protector and the beneficiaries (or
beneficial class) and any other natural person exercising ultimate
control over the trust. These details would be accessible by the
competent authority of each Member State and, potentially,
financial institutions such as banks, but the information would not
have to be made available to the wider public.
The recently elected EU parliament will have to vote on whether
it subscribes to the original proposals put forward by its
predecessor, or adopts these latest amendments put forward by the
Council of Ministers. Full agreement of the parliament, the
commission and the council is required for the directive to be
adopted into law. Trilogue negotiations between the three bodies
are expected to commence in October.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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