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EU AML agreement is pragmatic solution, says STEP Chair

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The European Union’s agreement on a revised Fourth Anti Money Laundering (AML) Directive has achieved a workable compromise, according to Edward Buckland, chair of STEP.

In a recent address to a STEP Policy Forum, Buckland said: ‘STEP sees the outcome for trusts that was hammered out in Brussels as a pragmatic solution to the problem of striking a balance between combating illicit money flows and preserving the right of the individual to confidentiality in their financial affairs.’

He cited STEP’s work on the Fourth AML Directive as being one of the most important and protracted policy initiatives in STEP’s history.

Initial proposals from the EU Parliament had called for a public register of beneficial ownership for companies, foundations and family trusts. Ultimately, however, it was recognised that the family nature of trusts argues strongly against a publicly-accessible register. The final agreement instead calls for national trust registers to be established based on information that will in any case be available to tax authorities, with access to this register only available to official investigators.

Buckland urged practitioners outside the EU to study the revised agreement and suggested the compromise may serve as a useful model to other countries looking to upgrade their AML regulations: ‘It provides a solution that is both relatively straightforward to operate (since it relies on information that authorities will already have) and allows easy access to the information by official investigators. Crucially, it also preserves legitimate confidentiality.’

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