All trusts held within the European Union could be forced to name beneficial owners, if new rules proposed by European Parliament are formally approved later this month.
Two European Parliament committees have voted to amend the Fourth EU Anti-Money Laundering Directive (AMLD), which will require trusts and trust-like entities to publicly identify their beneficial owners.
The original form of the directive was adopted by all EU institutions in May 2015. It required member states to create national registers of beneficial ownership of companies and some express trusts.
Public access to this information was to be restricted although company ownership data would be fully available to the relevant public authorities, and to those who could demonstrate a ‘legitimate interest’. Information on trusts was to be accessible only to the authorities and obliged entities.
Last year, following terrorist attacks in Paris, the EU agreed to modify the Fourth EU AMLD further to require details of beneficiaries of all trusts, not just taxable trusts, to be filed at central registries. Trusts designated as ‘private’ were to have some protection, in that information about beneficiaries was to be subject to the ‘legitimate interest’ criterion.
Now, the EU parliamentary Economics Committee and the Civil Liberties Committees have overwhelmingly approved amendments to remove this protection. This would mean granting all EU citizens full access to beneficial ownership information of companies and trusts of any kind, without having to give a reason. Beneficiaries will be able to keep their identities secret only if they can prove their personal safety would be at risk if revealed.
The proposal must now be put to the next plenary session of the European Parliament, which will take place later this month, according to industry reports. If approved – which, given the 89 votes to 1 outcome in committee, is likely – the European Parliament can begin tripartite talks with the European Commission and the European Council on a final draft of the directive.