On 29 January 2019, the Department of Finance published the European Union (Anti-Money Laundering: Beneficial Ownership of Trusts) Regulations (S.I. No 16 of 2019) (the "Regulations"). These Regulations, which were immediately effective, transpose Article 31 of the Fourth EU Money Laundering Directive ("4MLD") which requires trustees of express trusts to obtain and hold adequate, accurate and upto- date information in respect of the trust's beneficial owners and to keep and maintain a beneficial ownership register. The Regulations apply to any express trust whose trustees are resident in, or which is otherwise administered in, Ireland, including where shares are held on trust under an express declaration of trust.
The Regulations apply to Irish collective investment schemes that are constituted as trusts and so introduce a new requirement for these funds' trustees to obtain the information in relation to beneficial owners and to maintain a beneficial ownership register. Irish funds constituted as investment companies and ICAVs are already subject to these beneficial ownership requirements (for more information on the beneficial ownership requirements for these corporate entities, please see our previous briefing here). The Regulations specifically provide that a "collective investment undertaking trustee" for funds that are constituted as trusts includes the manager and/or operator of the fund. Therefore, both the depositary and the fund manager are trustees for these purposes and so are responsible for compliance with the Regulations. Accordingly, fund managers and depositaries of Irish unit trusts should ensure that appropriate arrangements are in place between them with regard to obtaining information on beneficial ownership and the maintenance of the beneficial ownership register.
WHO IS A BENEFICIAL OWNER?
In accordance with 4MLD, the Regulations provide that a beneficial owner is "any natural person(s) who ultimately owns or controls the customer and/or the natural person(s) on whose behalf a transaction or activity is being conducted". In the case of a trust this means all of the following:
the settlor(s) - in an Irish unit trust this is the fund manager; the trustees(s) - in an Irish unit trust this is the depositary and the fund manager; the protector(s), if any - an Irish unit trust will not have a protector; the beneficiaries (or if they have not yet been determined, the class of persons in whose main interest the trust is...