The EU (Anti-Money Laundering: Beneficial Ownership of Trusts) Regulations 2021 (SI 194/2021) (the Regulations) came into force on 24 April 2021. The Regulations revoke and replace the previous regulations EU (Anti-Money Laundering: Beneficial Ownership of Trusts) Regulations 2019 (SI 16/2019) (2019 Trust Regulations) which transposed 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. See our article on the 2019 Trust Regulations here.
The 2019 Trust Regulations required trustees to obtain information on beneficial ownership and to create and maintain a beneficial ownership register. The Regulations, when read with the recently amended Criminal Justice (Money Laundering and Terrorist Financing Act 2010 (the 2010 Act), essentially restate these obligations, with amended definitions and with some additional provisions, including the establishment of a “Central Register of Beneficial Ownership of Trusts” (the central register) to be maintained by the Revenue Commissioners.
What trusts are caught by the Regulation?
The Regulations apply to express trusts established by deed or other declaration in writing as well as any other arrangement or class of arrangements as may be prescribed by the Minister for Finance (relevant trust). There are some trust arrangements excluded from the ambit of the Regulations, including :-
- Occupational pension schemes and ARFs;
- Tax approved employee share ownership trusts.
The Regulations are applicable to any ‘relevant trust’ whose trustees are resident in Ireland or which is otherwise administered in Ireland. In addition, where the trustees are not resident in the EU and the trust is not otherwise administered in the EU, then Regulations will apply where a trustee of a relevant trust, when acting as a trustee enters a business relationship in Ireland or acquires land or other real property in Ireland in the name of the trust.
Who is a beneficial owner?
The definition of 'beneficial owner' has changed from that in the 2019 Trust Regulations and now means:
- the individuals who are beneficiaries of the trust or class of beneficiaries of the trust (eg employees in an employee share trust);
- any individual who has control over the trust;
- the settlor;
- the trustee;
- the protector.
What Information must be obtained?
The information which trustees are required to obtain and hold in respect of each of the trust’s beneficial owners is
- date of birth
- residential address
- PPS number or equivalent foreign tax number or national identity card number (which must be verified by the issuing authority)
- 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.
If a beneficiary is a legal entity that already has a beneficial ownership registration (eg on the central register for beneficial ownership of companies and industrial and provident societies operated by the Companies Registration Office), then the information to be obtained is limited to the beneficial owner's registered name and address, a statement of the nature and extent of the interest held or control exercised by it in relation to the trust and any filing number assigned to it by a central register. In other cases ie where the beneficial ownership of a legal entity who is a beneficiary is not recorded in another central register, or where the trustee, settlor or protector is a legal entity, trustees will be obliged to obtain the beneficial ownership information of any natural person who is a beneficial owner of the trust by virtue of ownership of that entity.
Who can access the BOR?
Trustees are required to provide access, on request, to the BOR to the Revenue Commissioners, and other state authorities (eg an Garda Síochána and the Central Bank) and those authorities may disclose the information in a BOR to any corresponding competent authority of another EU Member State.
Obligation to issue notices
The Regulations place an obligation on trustees to give a notice to any individual whom the trustees have reasonable cause to believe to be a beneficial owner of the trust, requiring the individual to state whether or not he or she is a beneficial owner of the trust and if so, to confirm or correct any particulars in the notice and supply any that are missing. Trustees are also obliged to seek confirmation from an individual by way of notice when they become aware of a change to the particulars recorded on the BOR.
The Regulations also oblige a beneficial owner of a trust in certain circumstances to notify the trustees of his or her status as such, and of relevant changes to their details.
Trustees must file (and keep up to date) information on the beneficial ownership of the trust with the central register, except where the beneficial ownership information has already been filed in the equivalent central register in another EU Member State. For existing trusts, the filing to the central register must be made before 24 October 2021 and for new trusts the obligation to file arises six months after establishment. The Revenue Commissioners have indicated that they expect the central register to be up and running by the end of July 2021.
Who has access to the central register?
There will be unrestricted access to the central register for certain authorities, such as the Revenue Commissioners and an Garda Síochána. Persons known as "designated persons" for anti-money laundering purposes (eg banks, accountants, solicitors), will, when conducting client due diligence, have access to the following information (the limited information):
- name, month and year of birth, country of residence and nationality of the beneficial owners and
- a statement as to the nature and extent of interest or control exercised by each beneficial owner.
A member of the public may have access to the limited information if he or she can demonstrate that:
- he or she is engaged in the prevention, detection or investigation of money laundering or terrorist financing offences and
- the relevant trust is connected with persons convicted of such offences or holds assets in a high-risk third country.
In addition designated persons and members of the public may request access to the limited information relating to any relevant trust which holds or owns a controlling interest in any corporate or other legal entity incorporated outside the EU.
The Regulations also impose obligations on trustees who are engaging with designated persons (banks, solicitors etc.) to inform the designated person that they are a trustee and provide information identifying all the beneficial owners of the trust.
Prior to the establishment of a business relationship with a trust, a designated person is obliged to ascertain details of the beneficial ownership of the trust and to confirm that the information entered in the central register is correct.
The Regulations have significantly increased the sanctions for failure to comply, with penalties for non-compliance extending to fines of up to €500,000 and/or up to 12 months imprisonment.