On 16 September 2020, the European Commission published a report to the European Parliament and the Council assessing whether Member States have duly identified and made subject to the obligations of the Fourth Anti-Money Laundering Directive (4MLD) all trusts and similar arrangements governed under their laws.
Article 31 of the 4MLD requires trustees or persons holding an equivalent position in a similar legal arrangement to:
- Obtain and hold adequate, accurate and up-to-date information on the arrangement’s beneficial ownership.
- Disclose their status and provide information on the arrangement’s beneficial ownership to obliged entities in a timely manner.
- Submit information on the arrangement’s beneficial ownership to the central beneficial ownership register set up in the country where the trustee is established or resides, or the country where the arrangement enters into a business relationship or acquires real estate when the trustee is established or resides outside the EU.
- Provide proof of registration in the central beneficial ownership register or an excerpt of it when wishing to enter into a business relationship in another Member State.
The 4MLD also obliges Member States to establish effective, proportionate and dissuasive measures or sanctions for breaches of the above obligations.
Given the variety of trusts and legal arrangements used within the EU, Article 31(10) of 4MLD provides that Member States must identify those legal arrangements that have a structure or functions similar to trusts, and notify to the Commission the categories, characteristics, names and, where applicable, legal basis of such arrangements. The Commission must publish these notifications in the Official Journal of the EU.
Article 31(10) of the 4MLD also requires the Commission to assess whether Member States have duly notified and made subject to the obligations of the Directive trusts and similar arrangements governed under their law.
A first list of Member States’ notifications was published on 24 October 2019, and was reviewed twice, with the most recent list published on 27 April 2020. This third list forms the basis of the analysis in the report now published.