Global Effort to Uncover Hidden Ownership: New Guidelines for Trust Beneficiaries and Settlors
In a significant move to boost transparency and combat financial crimes, international authorities have released new guidelines that require trustees to obtain and maintain accurate information about the beneficiaries of trusts.
Identifying the Ultimate Beneficial Owners of Trusts
The guidelines, issued by [Organization], stress the importance of identifying the ultimate beneficial owners of trusts, including those designated by characteristics or class. This means that trustees must now gather detailed information about all parties involved in a trust, including settlers, beneficiaries, and other legal persons or arrangements.
What is a Settlor?
A settlor is a natural or legal person who transfers ownership of their assets to a trustee through a trust deed or similar arrangement. A settlor can also be someone who provides property or funds for the trust, as long as they intend to provide some form of benefit rather than being an independent third party.
Identifying Settlors and Beneficiaries
The guidelines emphasize that it is crucial to identify the real economic settlor, even if their name is not listed in the trust instrument. In cases where a settlor or other party holds a similar role as a legal person, the beneficial owner of that legal person must also be identified.
Trustees’ Role
Trustees are responsible for managing and administering trust assets, subject to certain obligations and powers derived from the trust instrument, case law, and legislation. They play a central role in trust transactions and are required to conduct ongoing oversight and scrutiny of others who deal with trust property.
New Requirements
The guidelines impose new requirements on trustees to obtain and maintain accurate information about trust beneficiaries and settlers. This includes identifying the ultimate beneficial owners of trusts, as well as any legal persons or arrangements involved.
- Countries are encouraged to adopt a risk-based approach when implementing these guidelines, taking into account the complexity and nature of each trust arrangement.
- Countries may decide that it is not necessary to identify individual beneficiaries of certain charitable or statutory permitted non-charitable trusts.
International Cooperation
The new guidelines emphasize the importance of international cooperation in uncovering hidden ownership and preventing financial crimes. By working together, countries can ensure greater transparency and accountability in the global financial system.
Conclusion
As governments and regulatory bodies around the world move to implement these guidelines, it is clear that the era of secrecy in trust arrangements is coming to an end. The new requirements will help to increase transparency and confidence in the financial sector, ultimately benefiting individuals and businesses worldwide.