The European Union (Anti-Money Laundering: Beneficial Ownership of Trusts) Regulations 2019 (SI16/2019) (the Regulations) were signed by the Minister for Finance on 29 January 2019.
The Regulations transpose into Irish law the requirements of the Fourth Money Laundering Directive (EU 2015/849) regarding the creation and holding of beneficial ownership registers for trusts. With immediate effect trustees are now obliged to take all reasonable steps to obtain and hold adequate, accurate and current information in respect of the trust’s beneficial owners. The Regulations apply to all express trusts whose trustees are resident in Ireland or which are administered in Ireland.
Information to be obtained and held on beneficial ownership register
The information which trustees are required to obtain and hold in respect of each of the trust’s beneficial owners is
- name
- date of birth
- nationality
- residential address
- the date on which he or she was entered into the register
- the date on which he or she ceased to be a beneficial owner
Trustees are required to keep and maintain a register (BOR) and enter the information set out above in the BOR.
Meaning of beneficial owner
For the purposes of the Regulations ‘beneficial owner’ means the natural person(s) who ultimately own or control the trust or on whose behalf a transaction or activity is being conducted and includes
- the settlor
- the trustee(s)
- the beneficiaries, or where the beneficiaries have yet to be determined, the class of persons in whose main interest the trust is set up or operates
- any other natural person exercising ultimate control over the trust
Access to BOR
Trustees are required to provide access, on request, to the BOR to the Revenue Commissioners, and other state authorities (eg the Central Bank and Financial Services Authority) and those authorities may disclose the information in a BOR to any corresponding competent authority of another EU Member State.
Obligation to inform
The Regulations also impose obligations on trustees who are engaging with certain persons known as "designated persons" (eg banks, accountants, solicitors). Trustees must –
- inform the designated person that they are a trustee,
- on request provide information identifying all the beneficial owners of the trust and
- notify the designated person of any change in such information.
Changes to particulars & retention of records
Trustees are obliged to keep the BOR up to date and as soon as practicable after he or she learns that a person has ceased to be a beneficial owner or of any other change, her or she must make the relevant alteration or deletion in the BOR.
In addition, trustees must keep records of the actions taken in order to identify the beneficial ownership and retain those records for a period of at least 5 years after the date on which the final distribution is made under the trust. After that the trustee is required to delete the records unless he or she is required to retain them by law or for the purpose of court proceedings, or the person to whom the information relates consents to the retention of that information.
Sanctions
The Regulations allow a person whose details are incorrectly entered in or omitted from a BOR to apply to the High Court for rectification of the BOR. In addition to rectification of the BOR, the High Court may order payment by the trustee of compensation for any loss sustained.
Failure on the part of a trustee to comply with the Regulations is an offence, liable, on summary conviction, to a class A fine (up to €5,000).
Comment
The main focus of the Regulations is the requirement to obtain and hold the relevant information about beneficial owners on a BOR and to provide this information to certain persons (state authorities, designated persons etc.). There is no obligation on the trustee to issue notices as is the case with the beneficial ownership regulations for companies (EU (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2016 (SI 560/2016)), nor are there any obligations in these Regulations on beneficial owners to provide information to the trustee.
Still to come, under the Fifth Anti Money Laundering Directive (EU 2018/843), is a central register recording the beneficial ownership details of trusts which will be accessible by Irish government and EU agencies as well as limited access to any person that can demonstrate a legitimate interest.
European Union (Anti-money laundering: Beneficial ownership trust) Regulations 2019 (SI16/209)
