Trusts and beneficial ownership: Guidance for data collection and sharing

Introduction

Information about trusts is a critical element of beneficial ownership transparency, as set out in Open Ownership’s briefing Coverage of corporate vehicles in beneficial ownership disclosure regimes. [1] This is because within beneficial ownership networks trusts can own assets, including stakes in legal entities, and legal entities can be party to a trust.

Various international standards and laws – including the Financial Action Task Force (FATF) Recommendations, the European Union’s Anti-Money Laundering Directives and Regulations, and the United Nations Convention Against Corruption – require or recommend the collection of beneficial ownership information about trusts. Establishing trust registries is the best way for governments to facilitate the flow of relevant information, and to assess and discourage the use of trusts for illegal purposes. Open Ownership emphasises the need for user-friendly data collection forms which support the filing of adequate, accurate, and up-to-date information on parties to trusts, whether they are natural persons or legal entities.

This guidance sets out precisely what trust information should be collected (as a minimum). It stresses the importance of breaking information down into structured data at the point of collection. When the data needs to be shared, it is then possible to tailor its scope to the needs of different types of data users. A primary need of many data users will be using trust information to understand the beneficial ownership networks of trusts themselves and of larger corporate structures. For this reason, the guidance touches on the issue of trust identifiers and the need for them to be widely available.

In this guidance, the term “trust” is used to mean “express trusts and similar legal arrangements”. Any government agency considering improved transparency of trusts should make efforts to identify which legal arrangements are similar enough to express trusts to warrant official oversight. As advised by the FATF, [2] a risk-based approach should be taken to this identification process.

This guidance builds on Open Ownership’s advice relating to legal entities, Beneficial ownership declaration forms: Guide for regulators and designers. [3]

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