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Full text of Fourth European AML Directive published

Thursday, 15 January, 2015

The agreed texts of the EU's Fourth Money Laundering Directive and its associated regulations are now available.

The mandatory register of trusts applies only to taxable trusts and it will not be public. This is a crucial point stressed by STEP before trilogue negotiations began on the final form of the Directive this autumn. STEP consistently pointed out that trusts in common law countries are regularly used to protect vulnerable beneficiaries, some of whom could be at significant risk if their identities were published.

The strict limitations placed on access to trust registers is thus a welcome development. For companies and foundations, however, the register will be publicly available to those with a 'legitimate interest'.

STEP Deputy Chief Executive George Hodgson says: ‘STEP fully supports the principle that we need effective measures to prevent money laundering and is pleased that the EU has agreed a pragmatic way forward in this area. An important point is that trusts will remain confidential and not on a public register. It is clear that many of those originally arguing for trust beneficiaries to be publicly listed had not appreciated the role trusts widely play in protecting vulnerable beneficiaries. The development of public registers for companies and foundations will produce some significant challenges, however, and STEP looks forward to working with the Commission and others to help overcome these challenges.’

Sources