On 15th December 2017, tri-party discussions between the EU Council, the European Parliament and the European Commission reached a provisional agreement to incorporate stricter measures into the EU Fourth Anti-Money Laundering Directive (4AMLD) to increase transparency. Some of the fundamental changes to the 4AMLD relate to beneficial ownership registers as follows:
1. Registers for legal entities, such as companies, will be public.
2. Access to registers of trusts will be accessible without any restrictions to competent authorities, financial intelligence units, the professional sectors subject to anti-money laundering rules (e.g. banks, lawyers etc) and will be accessible to other persons who can demonstrate a "legitimate interest". Where a trust is a beneficial owner of a company, access to this information can be requested by a written request.
3. The 4AMLD already conceived that national beneficial ownership registers will be interconnected to facilitate cooperation and exchange of information between EU Member States. However, now Member States will have to put in place verification mechanisms of beneficial ownership information collected by the registers to help improve the accuracy of information and the reliability of these registers.
The provisional agreement will need to be formally endorsed by the European Parliament and the Council in due course whereupon EU Member States will have a maximum of 18 months to incorporate the new rules in national legislation.
Furthermore, it is worth noting that on 3 January 2018 the Commission announced that, as of 1 January 2018, new amended rules were introduced into the Directive on Administrative Cooperation giving national tax authorities direct access to information on beneficial owners of companies, trusts and other entities as well as customer due diligence records of companies. At the time of writing the amended version of this directive is not available on Lex-Europa (the legal website of the EU) to comment on the amended rules: the version of the directive published being last amended as of December 2016 and last consolidated in June 2017. However, given that EU legalisation is drafted in a civil law manner, it is likely that this directive's language will not need to fundamentally change to give effect to the new rules.
Published by Appleby in January 2018
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