On 17 July 2020, the Law of 10 July 2020 creating a register of fiducies and trusts ("RFT Law") entered into force. It transposes Article 31 of Directive (EU) 2015/849 as amended by Directive (EU) 2018/843 ("AMLD 5")1, thereby completing the transposition of these directives and introducing a series of measures increasing the transparency of the beneficial ownership of trusts, fiducies (i.e. fiduciary arrangements) and similar legal arrangements.
The Law provides, in particular, for the mandatory registration of certain personal data on the beneficial owners ("BO") of trusts and fiducies in a newly created register of fiducies and trusts ("RFT"), managed by the Administration de l'Enregistrement, des Domaines et de la TVA (the Luxembourg Registration Duties, Estates and VAT Authority - "AED"). The RFT is complementary to the register of beneficial owners ("RBO") established by the Law of 23 January 2019 creating a register of beneficial owners ("RBO Law") for legal entities registered in the Luxembourg Trade and Companies Register.
Although both regimes and their registers have similar features, there are also some notable differences. Some particular features of the RFT Law must be noted:
- The RFT Law provides for a registration obligation for trusts and fiducies and the allocation of a unique registration number to them;
- The RFT Law applies to any fiducie and any express trust with a fiduciaire (fiduciary agent) or a trustee established or residing in Luxembourg. It also applies to any express trust or fiducie for which the fiduciaries or trustees are established outside the European Economic Area to the extent that the fiduciary or the trustee, in the name of the fiducie or the trust, establishes a business relationship with a professional within the meaning of the AML Law2 or acquires a property that is located in Luxembourg;
- The RFT Law further defines these terms as well as which legal constructions are assimilated to trusts and fiducies and therefore subject to the same regime;
- Like entities subject to the RBO Law, fiduciaries are obliged to obtain and keep available, at the administrative office of the express trust or fiducie they administer, certain information defined by the RFT Law relating to the BO of these trusts and fiducies3. BO are the persons identified as BO of trusts or similar legal arrangements in the RFT Law: the settlor(s), the fiduciary(ies) or trustee(s), the protector(s), if any, the beneficiaries, or the class of beneficiaries, and any other natural person exercising ultimate control over the fiducie or trust by means of direct or indirect ownership or by other means. They must also obtain and hold information on any other professionals or entities subject to a foreign law who act as trust and company service provider to the fiducie or trust. All information must be adequate, accurate and up to date;
- The obligation to register the trust or fiducie as well as the information on their BO in the RFT lies with trustees and fiduciaries. The BO information to be filed is comparable to that of the RBO Law regime. There is a one-month filing deadline from the event triggering the registration obligation;
- The RFT Law provides for administrative fines of up to a maximum of 1,250,000 euros in case of non-compliance by trustees or fiduciaries with their duties;
- National authorities have access to all BO data in the RFT. Self-regulatory bodies and professionals also have access for the exercise of their duties with respect to anti-money laundering and anti-terrorist financing. Contrary to the RBO Law regime, access by the general public to the RFT is conditional upon the demonstration of a legitimate interest. As for the RBO, BO have the possibility to obtain an exemption from publication of their personal data upon demonstration of a disproportionate risk analogous to the standard of proof imposed by the RBO Law;
- Decisions by the AED may be challenged in the administrative court within a one-month deadline.
As indicated on the AED's website, registrations, modifications and consultations are carried out online on MyGuichet.lu via this link.
1. AMLD 5 has substantially amended Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing.
2. Amended law of 2 November 2004 on the fight against money-laundering and terrorist financing.
3. This obligation, introduced by the Law of 10 August 2018, is now integrated in the RFT Law.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.