The EU’s 5th Anti-Money Laundering Directive (5AMLD) - UBO Register of Trusts
The European Parliament is implementing the EU’s 5th Anti-Money Laundering Directive (5AMLD), as was agreed by EU Member States on 13th December 2017. EU member states will have until mid-2019 to implement the 5th AMLD into national legislation.
Agreed Changes for Register of Trusts:
- Public access: Each Member State will have to grant public access to the information held on their register of trusts. This will be subject to a “legitimate interest” test, where each Member State must define the conditions by law.
- Non-EU Companies: Access to the register of trusts must be granted to any member of the public in relation to a trust that holds or owns a controlling interest in a company which is not incorporated in the EU, and is therefore not included in any Member State’s register of beneficial ownership of companies.
- Up to date and accurate: Each Member State must ensure that the information on beneficial ownership in the register of companies and trusts is “adequate, accurate and current.”
- Central Platform: In order to ensure interconnection between each Member States’ registers of companies and trusts, each Member State must engage with the EU “Central Platform.”
Registration of UBO Trust Information
Ultimate Beneficial Owner (UBO) information of trusts will have to be registered in the Member State where the trustee is established or is resident. In the event that the trustee is a non-EU resident, or is established outside of the EU, then the registration must happen in the Member State where the trustee is in a business relationship or acquires real estate in the name of the trust.
Access to Registers of Trusts
Public access to EU registers of trusts will be subject to a legitimate interest test.
Each Member State will need to define what “legitimate interest” means in their country. This could result in different definitions across the EU. If a trust owns a controlling interest in a non-EU incorporated company, then access to that Member State’s register of trusts will be open to the public, meaning the legitimate interest test will not apply.
However, if a trust is based in a non-EU state and owns a controlling interest in an EU company, the register of trusts of the Member State of that EU company will remain subject to the legitimate interest test. This means that any person using companies or trusts and dealing with an EU State must be prepared for their UBO information to be publicly transparent.
Adequate, Accurate and Current Information
The EU is aware that registers are only as good as the information registered. As a result, “Obliged Entities” will be under obligation to “report any discrepancies they find between the beneficial ownership information available in the central registers and the beneficial ownership information available to them.”
Other Agreed Changes
- Bank Accounts Register - Each Member State will need to create a central register for ownership of bank accounts.
- Real Estate Owners - Member States will have to give financial intelligent units and competent authorities access to information that allows the identification of any natural or legal persons owning real estate in their territory.
- Extended Anti-Money Laundering (AML) Checks - AML checks will be extended to auditors, accountants, tax advisors, auction houses and estate agents.
The introduction of 5AMLD will be staggered over two to three years:
- The changes to registers of companies are due by November 2019.
- The enhanced access to registers of trusts will take effect from January 2020.
- The live date for the register of bank accounts is scheduled for June 2020.
- The interconnected Central Platform of registers of companies and trusts is to come into effect in early 2021.
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