On the 11th of April 2016, France announced its intention to make public its own register of beneficial owners of trusts and encouraged other countries to follow suit. This implying the set-up of a worldwide obligation to disclose to French tax authorities the full details of any trusts which have a French resident settlor, beneficiary or which have assets in France.
This register was then made public on the internet on the 5th of July. The Public Register of Trusts was set to contain the following information
- Identification of the trust and address;
- Date of setting-up and, if applicable, the date of termination of the trust;
- Dates and nature (annual and/or event based reporting) of the filings made by the trustee of the trust;
- Identification of the settlors, beneficiaries and trustees
All this information would then be archived for a period of 10 years after the termination of each trust. The public element included the possibility of a search open to the public on any of the following criteria:
- The identification of the trust;
- The identification of the settlors, beneficiaries or trustee
The launch and publication of this register led to a challenge by an American individual resident in France who is a beneficiary of one of the trusts made public. In a decision given on the 21st of October 2016, the French Constitutional Court stated that the public registry of trusts infringes the right to privacy in a disproportionate manner compared to the aim of fighting against tax fraud and evasion; and banned the whole registry (and not only its public nature), effective as from the publication of the decision in the French Official Gazette.
The French constitutional Court ruled that reference in a publicly accessible register of the names of the settlor, beneficiary and administrator of a trust provides information on how a person intends to dispose of his or her estate. This, resulting in a breach of the right to respect for private life.
This decision may be seen contentious. One might state that the public aspect of the register is unconstitutional, however, another view might be that the register itself is deemed unconstitutional.
Further to this case, it would be interesting to see the extent to which a decision of the French Constitution Court will influence the consideration of the new Anti-Money Laundering Directive, CRS and to some extent the trusts regime as a whole too.
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