Trust Issues: 23 October 2021 deadline for filing beneficial ownership information of trusts with central registerThursday, 30 September 2021
On 24 April 2021, the EU (Anti-Money Laundering: Beneficial Ownership of Trusts) Regulations 2021 (SI 194/2021) (the Regulations) came into force, transposing into law further obligations under the Fourth and Fifth Anti-Money Laundering Directives requiring the trustees of trusts to identify, register and file beneficial ownership information with the Central Register of Beneficial Ownership of Trusts (the CRBOT). Since January 2019, when the Department of Finance published preliminary regulations in this area (the 2019 Regulations), trustees have been required to maintain an internal register on the beneficial ownership of express trusts (Internal Register). See our earlier report on the 2019 Regulations for further details. The Regulations revoke and replace the 2019 Regulations.
The Regulations provide for an initial grace period of six months for filing with the CRBOT but the deadline for compliance is fast approaching on 23 October 2021.
Which trusts are within the scope of the Regulations?
The Regulations apply to any “relevant trust” which is defined as an express trust “established by deed or other declaration in writing” and:
- whose trustees are resident in Ireland; or
- a trust which is otherwise administered (e.g. its assets are managed or professional services are rendered to it) in Ireland; or
- if none of the relevant trust’s trustees are resident in the European Union and it is not administered in the European Union, where a trustee enters into a business relationship or acquires land or real property in the name of the trust in Ireland.
Unlike the 2019 Regulations, specified arrangements are now excluded from the scope of the Regulations. These include the following:
- occupational pension schemes approved under the Taxes Consolidation Act 1997 (TCA);
- approved retirement funds within the meaning of the TCA;
- profit sharing schemes or certain employee share ownership trusts approved under the TCA;
- trusts for restricted shares within the meaning of the TCA;
- the Haemophilia HIV Trust; and
- unit trusts (which are subject to separate registration requirements – see our earlier briefing here).
The Regulations cast a wide net over express trusts that fall within scope. There is no minimum threshold as to duration or value. Many common commercial arrangements therefore fall within scope such as family trusts, bare trusts for minors, declarations of trust regarding shares, nomineeships, charitable trusts, and security trusts.
Who are the beneficial owners of a relevant trust?
The Regulations define broadly who is a “beneficial owner” of a relevant trust. This includes, any individual who is entitled to a present or future vested interest in the trust or any other class of individuals in whose interest the trust is set up or operates, any individual who has control over the relevant trust, the settlor, the trustee, and the protector.
What are the obligations for trustees?
Trustees of a relevant trust must:
- ensure they take “all reasonable steps” to obtain and hold adequate, accurate and current information in respect of the beneficial owners of the relevant trust;
- establish and maintain an Internal Register for the relevant trust;
- file beneficial ownership information in the CRBOT; and
- ensure that the information in the Internal Register and in the CRBOT is kept up-to-date and aligned. The CRBOT must be updated within 14 days of the date on which the obligation to update the Internal Register falls to be discharged by the trustee.
What is the CRBOT and who has access to it?
The CRBOT is a standalone register operated by the Revenue Commissioners and registrations can be made through Revenue’s Online Service (ROS). Information may be submitted to the CRBOT by the trustee or by a presenter acting on their behalf such as an agent or advisor.
The following have unrestricted access to inspect the CRBOT:
- An Garda Síochána; Financial Intelligence Unit (FIU) Ireland; Revenue Commissioners; Criminal Assets Bureau; Other competent authorities engaged in the prevention, detection or investigation of possible money laundering or terrorist financing.
The following have access to the register, in certain circumstances:
- A “designated person” (e.g. credit and financial institutions, auditors, accountants, tax advisors, independent legal professionals, trust or company service providers) will have access to certain information on the CRBOT where a trustee enters into an “occasional transaction” with a designated person. An “occasional transaction” is one which involves customer due diligence measures or formation of a business relationship with the relevant trust.
- A member of the public may also apply for access where they can demonstrate a legitimate interest to inspect the CRBOT such as a journalist investigating suspected money laundering activity by a relevant trust.
What information must be obtained by the trustees?
Trustees of relevant trusts must obtain and hold the following information on each beneficial owner:
- the name, date of birth, nationality and residential address of each beneficial owner;
- a statement of the nature and extent of the interest each holds, or the nature and extent of control exercised by them;
- the PPS number of each beneficial owner; or if the beneficial does not have a PPS number and is resident in another state, any unique number issued to them in that state for tax purposes, passport number or national identity number along with a copy of the document issued by the authority in that state which contains the number; and
- the date on which they were entered on the Internal Register, and where applicable, the date on which they ceased to be a beneficial owner.
The trustees must file the information specified above on CRBOT (save for the date of entry or cession on the Internal Register). With regard to the PPS number (or equivalent national number for those without a PPS number) of each beneficial owner, this information will not be included on the CRBOT register, and shall be stored securely by the Registrar.
Where the beneficiary of the relevant trust is a legal person whose beneficial ownership information is recorded in an Irish or EU central register of beneficial ownership (e.g. the RBO or the Beneficial Ownership Register for Certain Financial Vehicles) then the trustee need only hold the following information on that entity:
- the name and registered address of the entity;
- a statement of the nature and extent of the interest held, or the nature and extent of control exercised by it, in relation to the relevant trust; and
- any filing number assigned to the entity by the relevant register of beneficial ownership.
What is the timeline for filing with the CRBOT?
Trustees of relevant trusts established on/before 23 April 2021 must register and file with the CRBOT by 23 October 2021.
Trustees of relevant trusts created after 23 April 2021 must file within six months of their establishment.
What are the sanctions for non-compliance with the Regulations?
Failure to comply with the Regulations is an offence liable on summary conviction to a fine up to €5,000, or on conviction on indictment to a fine up to €500,000. The relevant penalty may be applied to the trustee or trustees. Where a trustee is a body corporate, its officers and managers may be individually liable for any offence of the body corporate, where such officers were involved in the conduct concerned.
Trustees of all express trusts must take steps to:
- assess whether their trust is in-scope;
- identify the beneficial owners of any relevant trust;
- maintain up-to-date Internal Registers for each relevant trust; and
- submit the required beneficial ownership information to the CRBOT by 23 October 2021.
For further information or more detailed advice on the duties of trustees under the Regulations, including maintaining up-to-date Internal Registers and filings with the CRBOT, contact Gillian O’Shaughnessy (Corporate), Michael Walsh or Alison O’Sullivan (Property), James Moreland (Corporate Secretarial), Liam Connellan (Pensions and Benefits) or your usual ByrneWallace LLP contact.