On 28 June 2021, the Implementation decree concerning the registration of beneficial owners of trusts and similar legal arrangements (Implementatiebesluit registratie uiteindelijk belanghebbenden van trusts en soortgelijke juridische constructies, the Implementation Decree) was published for public consultation by the Dutch Minster of Finance.
The Implementation Decree, together with the Implementation act concerns the registration of beneficial owners of trusts and similar legal arrangements (Implementatiewet registratie uiteindelijk belanghebbenden van trusts en soortgelijke juridische constructies, the Implementation Act), implements Article 31 of the Fifth Anti-Money Laundering Directive and introduces a central beneficial ownership register for trusts and similar legal arrangements (the Trust Register). The most relevant similar legal arrangement in the Netherlands is the fund for joint account (fonds voor gemene rekening, FGR).
The Implementation Decree elaborates on a number of matters that are covered in the Implementation Act in relation to the Trust Register:
- the definition of ‘ultimate beneficial owner’ (UBO);
- the classes in which the size of an UBO’s economic interest can be expressed;
- retention periods (of the information contained in the Trust Register);
- the grounds which can be used by UBOs to request shielding of their information included in the Trust Register from the public; and
- the competent authorities that will be granted access to the Trust Register.
One of the most notable aspects of the Implementation Decree is the following. The Implementation Act only refers to the general UBO definition laid down in Article 10a of the Act on the prevention of money laundering and terrorist financing (Wet ter voorkoming van witwassen en financieren van terrorisme, Wwft) which must be read in conjunction with the Implementing Decree Wwft 2018 (Uitvoeringsbesluit Wwft 2018). In relation to FGRs this means that the following categories of natural persons qualify as UBOs:
- the FGR’s founders;
- the beneficiaries of the FGR (i.e. its unitholders), or where the individuals who are the beneficiaries of an FGR cannot be determined, the group of individuals in whose interests an FGR is primarily formed/operated; and
- any other natural persons who directly or indirectly, through ownership or otherwise, are able to exercise ultimate control over the FGR.
As a result, based on the Implementation Act alone all of the FGR’s unitholders would in principle – regardless of the size of their interest – qualify as a UBO and need to be registered in the Trust Register. This would result in a burdensome task for managers of FGRs, as they would need to ensure that all unitholders are registered in the Trust Register and that any changes are reported to the Dutch Chamber of Commerce. The Implementation Decree aims to take away some of the burden by amending the Implementing Decree Wwft 2018 in such a way that only beneficiaries (i.e. unitholders) with an economic interest of at least 3% will be considered UBOs. Unitholders with an economic interest below this threshold will not need to be registered in the Trust Register. If a FGR has no unitholders with economic interests of 3% or more, the registration will be limited to a description of the group of individuals in whose interests an FGR is primarily formed/operated.
Managers of FGRs will in any event need to have policies/procedures ensuring that the right unitholders will be registered in the Trust Register and that changes (unitholders falling below or reaching the threshold) will be reflected in the Trust Register in a timely manner.