4th EU Money Laundering Directive still provoking debate over publicly accessible register

Discussions within the European Union (EU) regarding the new Money Laundering Directive remain at a standstill, as the EU Parliament have put forward a request to have a set of publicly accessible registers listing owners of foundations and trusts.

This 4^th EU Money Laundering Directive was initially proposed in 2013 as a way of tackling illegal activity by strengthening the screening processes.

The European Commission formulated a draft Directive, followed by Financial Action Task Force (FATF) Recommendations, as well as the G20 statement of principles. The intention was to enhance the clarity of beneficial ownership of companies, trusts, and similar legal entities.

The EU Parliament are calling for amendments to be made and for an accessible register to be available to the public. However this is something that Member States are strongly opposing and do not wish to have a register of all beneficiaries available.

The UK government are seemingly in favour of the proposal, having put forward the Small Business, Enterprise and Employment Bill, which complies with the Directive. Government officials are stating that it will help reduce crime and improve law enforcement.

Many legal professionals are said to be unaware of the proposals put forward, with some not realising the registers will include more than just trusts. It’s also being speculated that if the EU adopt this type of system, they will aim to have this introduced in surrounding areas.

Following the debate in Brussels, the Commission are reportedly formulating a compromise between the EU Parliament and Member States. However the Parliament refuse to negotiate demands for a beneficial ownership register available for free to the public.

The Society of Trust and Estate Practitioners (STEP) have announced they are against the proposal, claiming it is intrusive to reveal the financial affairs of families, putting them at risk.