The case
The FATF requested comments on its updated risk-based guidance on Recommendation 25 on beneficial ownership and transparency of legal arrangements. Comments on the “Draft Amendments to the FATF Guidelines on Beneficial Ownership (R.25)” were due by 8 December (18:00 CET).
Source: FATF and extract of one of the comments forwarded
The commentary
What is of particular interest at this point in time are the answers to question 5 concerning the proposed approaches to identifying, assessing and mitigating the ML/TF risks associated with different types of legal arrangements (trusts under domestic law, foreign trusts administered in the country as well as foreign trusts with sufficient connections to the country).
According to a statement made by an international organization, one will have to clarifiy what counts as a sufficient connection to a country. It is suggested that the starting point should be the registered office of the trustee but not the applicable law of the country under which the trust was established. For example, trustees of Cayman Islands law trusts who are residents of Hong Kong and Singapore are not necessarily subject to the full extent of Cayman Islands law as would apply to trustees. There is no trust law in Switzerland, so Swiss trustees act as trustees of trusts that are subject to a variety of laws (e.g. BVl, Jersey and Cayman).
