The EU's Fifth Anti-Money Laundering Directive (AMLD) must be transposed into national law by member states before January 10, 2020. Building on earlier directives, the directive aims to align with international standards. In addition to other measures expanding the scope of regulation and regulated business activities, the Fifth Directive requires the establishment of a centralized, publicly accessible register of beneficial owners for companies and trusts. Separate bank account registers must also be created, although only relevant authorities can access these registers.
Although public information on beneficiaries is limited to basic details, it may still pose confidentiality risks for those relying on such information. Beneficial owners include beneficiaries of trusts, typically children.
Compared with the EU, Hong Kong trusts can still provide confidential information for beneficiaries. If settlers and protectors are concerned about the registration of public beneficial owners, they may consider transferring the trust fund from the trustee's domicile or resettling in Hong Kong.
Most member states seem to be taking considerable time in implementing AMLDs, but the time to act was yesterday.
