Shearman & Sterling LLP | FinReg | UK Government Launches Consultation on Application of EU Fifth Money Laundering Directive to Trusts
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  • UK Government Launches Consultation on Application of EU Fifth Money Laundering Directive to Trusts
    HM Treasury and HM Revenue and Customs have launched a consultation on the implementation of rules governing the registration of trusts under the EU Fifth Anti Money Laundering Directive. Responses to the consultation should be submitted by February 21, 2020.

    5MLD expanded the scope of the trusts that should be registered with national regulators for AML monitoring purposes to include all express trusts, regardless of whether they incur tax consequences, as well as certain non-EU resident express trusts. In the U.K., the Trust Registration Service is responsible for registering such trusts. 5MLD also requires national regulators to disclose data about trusts and their beneficial owners. The majority of the 5MLD requirements were implemented in the U.K. with effect from January 10, 2020 under the U.K. Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, but the U.K. elected to hold a separate technical consultation on aspects of the trusts provisions.

    The consultation paper sets out draft legislation designed to implement relevant changes to the U.K. Money Laundering Regulations. The draft legislation excludes certain types of trusts, including statutory trusts, charitable trusts and trusts with two or more people legally and beneficially co-owning an asset, from the registration requirements. The consultation paper seeks feedback on whether other trusts should be excluded and on the proposed registration deadlines and penalty regimes for non-compliance. The consultation paper also seeks feedback on the proposed processes for the sharing of data held by the Trust Registration Service.

    View the joint consultation document on 5MLD and Trust Registration Service.

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