Protecting Privacy and Anonymity Amidst Public Beneficial Owner Registers in Europe

The EU’s 5th Anti-Money Laundering Directive (AMLD) was to be transposed into national law by Member States by 10th Jan 2020. The Directive builds on earlier directives, intending to catch up to international standards. Among other measures that widen the scope of regulation and regulated businesses, the 5th AMLD requires the establishment of a centralized, publicly-accessible register of beneficial owners of companies and trusts. Separate registers for bank accounts must also be created, although these will only be accessible by authorities.

Although the publicly accessible information of beneficial owners is limited to basic information, it may still pose a risk to beneficiaries that have relied on such information being confidential. Beneficial owners include beneficiaries of trusts which are often children.

In contrast to the EU, Hong Kong trusts can still provide the confidentiality of beneficiaries. Where settlors and protectors are concerned about a public beneficial owner register, moving the trust by the domicile of the trustees or resettling in Hong Kong can be considered.

It seems that most Member States take their time with the implementation of the AMLDs, but the time to act was yesterday.

For more information and a discussion about trusts in Hong Kong, please contact us at 3552 9085.

Zetland Tax