Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on information accompanying transfers of funds Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing - Declarations by Member States - Hoofdinhoud

Council of the European Union Brussels, 12 January 2015 (OR. en)

5116/15

Interinstitutional Files: ADD 3

2013/0024 (COD) i 2013/0025 (COD) i EF 6 ECOFIN 12 DROIPEN 1 CRIMORG 7 CODEC 20

"I" ITEM NOTE

From: Presidency

To: Permanent Representatives Committee

No. Cion doc.: COM (2013) 44 final i

COM (2013) 45 final i

Subject: Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on information accompanying transfers of funds

Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing - Declarations by Member States

DECLARATION BY AUSTRIA

Austria is strongly concerned that the current text does not enhance transparency on beneficial ownership information necessary to avoid the abuse of trusts for the purpose of money laundering and terrorist financing. There is a clear need to establish central and public beneficial owner registries in the very country by whose laws a legal person or a trust is governed. As far as legal persons are concerned, the current text (Article 29) states that the location of the beneficial owner registry shall be the country by whose laws the legal person is governed. Unfortunately, the same does not hold true for trusts (Article 30). The current wording does not clearly state the location of trust registries. In our view, meaningful trust registries need to be located in the countries by whose laws the trust is governed. Any other location would not serve the purpose of creating greater transparency, particularly because trusts are not recognized in the majority of Member States.

Above all, the current wording leaves room for extensive interpretation when it comes to national implementation of Article 30. There is a clear danger that Member States will interpret the provision of Article 30 differently, which eventually will result in some Member States establishing beneficial owner registries for trusts while others will not. That being said, the current wording of Article 30 opens the floodgates to abuse, in particular with respect to the usage of trusts in crossborder circumstances. Furthermore, Article 30 paragraph 4 determines the registration of beneficial owners of trusts only when a trust “generates tax consequences”. In our view, this wording is too broad and highly prone to circumvention and evasion. For example, a tax exemption for certain types of trusts introduced by a Member State would consequently result in the abolition of the obligation to register the beneficial owner of such trusts. Such intended or unintended consequences may undermine the purpose of the provision. Austria remains highly critical of the current wording of Article 30 and does not support it. However, in order not to jeopardize an otherwise reasonable compromise text, Austria can accept the political compromise. Nevertheless, given the current wording of Article 30, Austria sees no need for implementing a beneficial owner registry for trusts in Austria.

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