Is a coherent EU anti-money laundering approach to trusts within reach? ask Helen Darling and Katherine Hill
The passage of the Third European Money Laundering Directive 2005/60/EC (the Directive) into domestic law, scheduled for 15 December 2007, has not been as smooth as the government hoped. The first draft of the Money Laundering Regulations 2007 (the draft regulations) was published in January this year to widespread criticism from representative bodies including the Law Society and the Society of Trust and Estate Practitioners. Concerns focused predominantly on the impact of Pt 2 of the draft regulations dealing with customer due diligence (CDD) and, particularly, a perceived failure to provide clarity on how CDD requirements apply to trusts.
Concerted lobbying by domestic bodies and, ultimately, intervention by the European Commission resulted in the definition of beneficial ownership contained in the draft regulations being significantly amended. In July 2007 the revised Money Laundering Regulations 2007 (SI 2007/2157) (the regulations) were published in what the government has stated is their final form. The changes appear to have pacified the English trust community. However, the issues
