This report analyses the current definitions of beneficial ownership of trusts in the global context (based on the FATF Recommendations on Anti-Money Laundering) and the registration requirements in the European Union (based on the EU Fourth Anti-Money Laundering Directive). It identifies loopholes in both regulations and suggests amendments to address them, in relation to: the scope of covered trusts, the registration authority, the effects of such registration, the conditions that may trigger registration (i.e. the governing law of the trust, the tax consequences, having a resident trustee, the number or professional status of the trustee, location of trust assets, etc.). The report explains the complexities of trusts and discusses how their proper registration can be ensured. It considers the potential number and roles of related parties within the ownership structure of trusts, the choice of governing law (between domestic and foreign), the available types of trusts and how they can be used for legitimate purposes as well as be abused to commit financial crimes (tax evasion, money laundering, defraud creditors, etc.).
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