REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL assessing whether Member States have duly identified and made subject to the obligations of Directive (EU) 2015/849 all trusts and similar legal arrangements governed under their laws
Date: 2020-09-16
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: EU Member State, common law, disclosure of information, economic offence, exchange of information, money laundering, organisation, ownership, terrorism financing, trust company

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 16.9.2020  COM(2020) 560 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL assessing whether Member States have duly identified and made subject to the obligations of Directive (EU) 2015/849 all trusts and similar legal arrangements governed under their laws  
 
 
I.  Introduction 

Over the past decades, criminals have exploited the globalisation of the financial system and 
trade  as  well  as  technological  innovation  to  hide  and  move  their  illicit  funds  around  the 
world.  Legal  entities  and  arrangements  are  the  main  vehicle  used  to  disguise  money 
laundering as legitimate corporate trade, often through complex structures and networks, and 
may also be used to perpetrate predicate offences, including tax crimes. 

In the aftermath of the Panama Papers and Lux Leaks, the European Union has taken steps to 
ensure the transparency of beneficial ownership of legal entities and arrangements, including 
legal  arrangements  governed  under  Member  States’  law  or  custom  that  have  a  structure  or 
functions similar to trusts. 

Article 31 of Directive (EU) 2015/8491 (the Anti-Money Laundering Directive or “AMLD”) 
requires trustees or persons holding an equivalent position in a similar legal arrangement to: 

-  Obtain and hold adequate, accurate and up-to-date information on the arrangement’s 

beneficial ownership;   

-  Disclose  their  status  and  provide  information  on  the  arrangement’s  beneficial 

ownership to obliged entities in a timely manner; 

-  Submit  information  on  the  arrangement’s  beneficial  ownership  to  the  central 
beneficial ownership register set up in the country where the trustee is established or 
resides, or the country  where the  arrangement enters  into a business  relationship or 
acquires real estate when the trustee is established or resides outside the EU, and 
-  Provide proof of registration in the central beneficial ownership register or an excerpt 
of it when wishing to enter into a business relationship in another Member State.2 

The AMLD  also  obliges Member States to  establish effective, proportionate and dissuasive 
measures or sanctions for breaches of the above obligations. 

In light of the variety of trusts and legal arrangements used within the EU, Article 31(10) of 
the AMLD provides that Member States must identify those legal arrangements that have a 
structure  or  functions  similar  to  trusts,  and  notify  to  the  Commission  the  categories, 
characteristics,  names  and,  where  applicable,  legal  basis  of  such  arrangements.  The 
Commission must publish these notifications in the Official Journal of the European Union,  

Article 31(10) of the AMLD also requires the Commission to assess whether Member States 
have duly notified and made subject to the obligations of the Directive trusts and similar legal 
arrangements governed under their law. This  report complies with this obligation, based on 

1 Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of 
the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation 
(EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the 
European Parliament and of the Council and Commission Directive 2006/70/EC (Text with EEA relevance), OJ 
L  141,  5.6.2015,  p.  73–117,  as  amended  by  Directive  (EU)  2018/843  of  the  European  Parliament  and  of  the 
Council of 30 May 2018, OJ L156, 19.6.2018, p. 43-74. 
2 Similar provisions regarding transparency of beneficial ownership of legal entities can be found in Article 30 
AMLD. 

 
 
 
 
 
 
 
 
                                                 
Member  States’  notifications,  their  oral  and  written  input  through  the  Expert  Group  on  the 
Prevention  of  Money  Laundering  and  Terrorist  Financing,  as  well  as  analyses  produced  by 
the  Financial  Action  Task  Force  (FATF)  and  the  Organisation  for  Economic  Development 
and Cooperation (OECD) and academic research. 

II.  Notifications by the Member States 

A  first  list  of  Member  States’  notifications  was  published  on  24  October  2019,3  and  was 
reviewed  twice,  with  the  most  recent  list  published  on  the  27  April  2020.4  This  third  list 
forms the basis of the analysis in this report. 

Sixteen Member States5 indicated that no trusts or similar legal arrangements are governed by 
their laws.6  

The remaining other Member States notified trusts or similar legal arrangements governed by 
their laws, as follows: 

-  Three Member States7 and the United Kingdom notified that trusts are governed under 
their  legal  systems,  and  three  additional  Member  States8  notified  that  trusts  are 
recognised  in  their  territory  based  on  the  provisions  of  the  Hague  Convention  of  1 
July 1985 on the Law Applicable to Trusts and on their Recognition.9 

-  Seven  Member  States10  notified  similar  arrangements  governed  under  their  national 

law.  

-  Two Member States11 notified legal arrangements that are not expressly regulated in 
their  national  law,  but  are  based  on  the  general  principle  of  the  autonomy  of  the 
contracting  parties  and  delimited  by  jurisprudence  and  doctrine.  For  the  purpose  of 
transposing  Article  31  of  the  AMLD,  Germany  explicitly  mentioned  the  above 
arrangements in its anti-money laundering law. 

These notifications are analysed in the next chapter. 

III. Overview of legal arrangements 

AML/CFT rules do not define legal arrangements as such, but identify the common law trust 
as  an  example.  Other  arrangements  become  relevant  according  to  the  similarity  of  their 

3 OJ 2019/C 360/05, p. 28-29. 
4 OJ 2020/C 136/05, p. 5–6. 
5 Austria, Belgium, Bulgaria, Croatia, Denmark, Estonia, Finland, Greece, Latvia, Lithuania, Poland, Portugal, 
Spain, Slovakia, Slovenia and Sweden. 
6 While this is also the case for Portugal, a specific provision under Portuguese law recognises foreign trusts and 
allows them to perform business activities exclusively in the Madeira Free Trade Zone. (Decree-Law 352-A/88, 
amended by Decree-Law 264/90). 
7 Cyprus, Ireland, Malta. 
8 Italy,  Luxembourg and the  Netherlands notified that they have ratified the Hague  Convention. N.B. Cyprus, 
Malta and the U.K. have also ratified the 1985 Hague Convention. 
9 https://www.hcch.net/en/instruments/conventions/status-table/?cid=59. 
10 Czechia, France, Hungary, Italy, Luxembourg, Romania and the Netherlands. 
11 Germany and Italy. 

 
 
 
 
 
 
 
 
 
                                                 
structure or function with that of a trust. Like trusts, these arrangements enable a separation 
or disconnection of legal and beneficial ownership of assets. This does not necessarily mean 
divisibility  of  ownership,  a  concept  typical  of  common  law  but  not  recognised  under  civil 
law.12 Rather, similar legal arrangements generally involve a mechanism where the property 
is  entrusted  to  one  person,  who  holds  the  title  to  it  or  manages  it  for  the  benefit  of  one  or 
more other persons or for a specific purpose.13  

This  chapter  reviews  the  main  features  of  trusts  and  other  main  arrangements  with  either  a 
similar structure or function to trusts. The list does not intend to be exhaustive. 

III.1  Trusts 

Trusts are legal arrangements that were developed in common law jurisdictions, in which a 
settlor transfers some assets to a trustee, who exerts control over them in the interests of one 
or  more  beneficiaries,  determined  by  the  settlor.  The  assets  held  in  the  trust  constitute  a 
separate  patrimony  from  that  of  the  trustee,  while  other  parties,  such  as  the  settlor  and 
protector, may also exert some level of control or influence over it. The complex structure of 
trusts makes the identification of the beneficial owners difficult, and requires further efforts 
to determine the true nature of the trust relationship.14 Analyses of money  laundering cases 
show that the risks of misusing trusts increase when several participants to the trust coincide 
with the same natural or legal person, or when trusts are set up in foreign jurisdictions. 

The  three  Member  States  and  the  United  Kingdom  have  notified  that  trusts  are  governed 
under  their  legal  systems,  based  either  wholly  or  partly  on  common  law.  They  either 
identified  specifically  the  express  trust,  as  done  by  Ireland  and  the  United  Kingdom,  or 
referred to trusts in general, as Cyprus15 and Malta16 did. Cyprus also notified a sub-category 
of trusts, namely the international trusts.17  

All four of the above mentioned countries point to trusts that have been set up willingly by 
the  parties,  thus  excluding  those  trusts  that  are  imposed  by  operation  of  law  or  that  result 
from  the failure of an express  trust,  generally defined as statutory, constructive or resulting 
trusts. This reflects the provisions of the AMLD. 

However,  trusts  might  be  recognised  in  other  Member  States  as  well.  For  example,  despite 
the  fact  that  Lithuania  did  not  notify  any  trust  or  similar  legal  arrangement  that  would  be 
recognised under its national law, literature points to the fact that the Lithuanian Civil Code 
(Book  Four  (Material  Law),  Part  I  (Things),  Chapter  VI  (Right  of  Trust))  introduces  the 
concept of trust under national law. In particular, Article 4.106 provides for extensive rights 

12 Sandor, I. (2015) “The legal institution of the trust in the economy and law of Eastern European countries”, 
European Scientific Journal April 2015 SPECIAL edition 1857 – 7881, p. 139-149 
13  Sepp,  K.  (2017).  “Legal  Arrangements  Similar  to Trusts  in  Estonia  under  the  EU’s  Anti-money-laundering 
Directive”, Juridica International, 26 (56-65).  
14 FAFT and Egmont Group (July 2018), Concealment of Beneficial Ownership 
15 Trustee Law (CAP 193) 
16 Trusts and Trustees Act (Chapter 331 of the Laws of Malta) 
17 International Trusts Law (Law No 69(I)/92 as amended by Law No 20(I)/2012, and Law No 98(I)/2013) 

 
 
  
 
 
 
 
 
                                                 
over the assets for the trustee, essentially equal to the owner’s rights. Under this arrangement, 
both  the  owner  and  the  trustee  have  in  rem  rights  over  the  assets,  which  makes  this 
arrangement very close to the common law trust.18  

Three  additional  Member  States,  namely  Italy,  Luxembourg  and  the  Netherlands,  notified 
that while trusts are not governed under their national law, they are recognised in their legal 
system  based  on  the  provisions  of  the  1985  Hague  Convention,  which  they  have  ratified. 
While  Belgium  did  not  notify  any  legal  arrangement  recognised  under  its  law,  literature 
suggests  that  it  is  in  a  similar  position  to  these  three  Member  States,  having  integrated  the 
concept of trust in its Civil Code of International Private Law (chapter XII). These provisions 
do  not  allow  trusts  to  be  set  up  under  Belgian  law,  but  to  recognise  trusts  lawfully  set  up 
under foreign law.19  

III.2  Legal arrangements similar to trusts identified by the AMLD and notified by 

Member States 

While  common  law  trusts  can  hardly  be  reproduced  as  such  in  civil  law,  other  legal 
arrangements  show  significant  similarities  in  terms  of  function  or  structure.20  In  these 
arrangements,  the  separation  between  legal  and  beneficial  ownership  is  not  necessarily  as 
strong as it is in trusts, but they nonetheless create a fiduciary bond that can be assimilated to 
the one provided in a trust. 

III.2.a  Fiducie 

Fiducies  are  among  the  legal  arrangements  specifically  identified  by  the  FATF  and  the 
AMLD  as  similar  to  trusts.  These  legal  arrangements  are  generally  based  on  a  scheme 
involving three parties in which one or more transferors transfer assets to a fiduciary, for the 
benefit or one or more identified beneficiaries. Such scheme entails separation of the assets 
from  the  personal  assets  of  the  transferor.  Under  this  arrangement,  the  fiduciary  has  an 
obligation to manage the assets according to the terms of the agreement with the transferor.  

Fiducies are a quite common legal arrangement in Europe, especially in French-speaking and 
Latin countries. The specific features of a  fiducie can vary and adapt based on the different 
Member  States  and  the  respective  national  legal  systems.  Three  Member  States  notified 
arrangements of this type that are regulated directly by national law. This is the case of the 
French  fiducies  (article  2013  of  the  French  Civil  Code),  Luxembourg’s  contrats  fiduciaires 
(Law  of  27  July  2003)  and  Romania’s  fiducia  (Articles  773-791  of  the  Romanian  Civil 
Code). 

18 Sandor, I. (2016) “Different Types of Trust from an Ownership Aspect”, European Review of Private Law,  6-
2016, p. 1189–1216 
19  Wautelet,  P.  (2005)  “Le  nouveau  droit  international  privé  belge”,  Euredia:  Revue  de  Droit  Bancaire  et 
Financier, p. 111-134. 
20 Schmidt,  K. (2016) “Trust as a Legislative Challenge: Bipolar Relation vs Quasi-Corporate Status? – Basic 
Trust Models in Legal Practice, Theory, and Legislation”, European Review of Private Law 6, p. 995–1010. 

 
 
 
 
 
 
 
 
 
                                                 
In other cases, a similar arrangement is based on the general principle of the autonomy of the 
contracting parties, and is delimited by court judgements  and doctrine. This  is  the case, for 
instance, of the fiduciary mandate (mandato fiduciario), notified by Italy. Although there are 
no  national  provisions  regulating  this  type  of  contract,  it  customarily  takes  the  form  of  a 
scheme that corresponds to that of a fiducie, with the same effects as regards the separation 
and transfer of assets to a fiduciary for the benefit of one or more beneficiaries.   

Like the Italian mandato fiduciario, the Spanish fiducia is also based on the autonomy of the 
contracting parties set out in Article 1255 of the Spanish Civil Code. Under this arrangement, 
the fiduciary holds a title to the assets, which does not transfer him the ownership but permits 
him  to  act  as  an  owner  regarding  third  parties,  and  to  administer  the  property  with  full 
powers.21  This  arrangement  has  not  been  notified  by  Spain  as  it  considers  that  this  type  of 
contract  cannot  be  considered  similar  to  a  trust,  in  that  the  fiduciary’s  ownership  is  only 
formal  and  there  is  no  transmission  of  property  stricto  sensu.  However,  this  arrangement 
grants an effective, albeit limited, title to the property to the fiduciary, comparable to that of 
other  trust-like  arrangements  analysed  in  this  report.  The  lower  degree  of  protection  of  the 
beneficiary’s  rights  compared  to  a  trust  is  also  comparable  to  that  of  other  trust-like 
arrangements  analysed  here.  Moreover,  the  absence  of  a  public  form  of  notice  of  the 
existence of the fiduciary title will make the fiduciary appear as the sole owner of the assets 
in front of bona fide third parties.  

All these similarities suggest that the Spanish fiducia presents a similar function to that of a 
trust,  which  would  have  justified  its  notification  under  Article  31(10)  of  the  AMLD.  It  is 
important  to  note  that  this  is  not  an  isolated  case.  Another  example  where  the  literature 
considers that, unless prohibited by law, arrangements based on the Latin fiducia are similar 
to trusts is the Netherlands, which did not notify this arrangement either.22  

The  category  at  hand  could  be  further  extended  to  include  other  legal  arrangements 
recognised  under  national  law,  which  present  similar  features  despite  some  differences,  for 
instance, in the nature of the bond established between the parties. With regard to this group, 
the bizalmi vagyonkezelő notified by Hungary (Act V of 2013 on the Civil Code and Act XV 
of  2014  on  trustees  and  the  rules  governing  their  activities)  is  a  relevant  example.23  Under 
this  arrangement,  the  trustee  has  the  duty  to  manage  the  property  transferred  into  his 
ownership  by  the  settlor  in  his  own  name,  for  the  benefit  of  the  beneficiary,  for  which  the 
settlor is obliged to pay a fee. 

Another  example  is  the  vincolo  di  destinazione,  notified  by  Italy  (Article  2645-ter  of  the 
Italian Civil Code), which consists of a scheme where the owner of immovable property or 
assets registered in  public registers establishes a  bond over such property. By virtue of this 
bond, the assets  can be managed and used only  for serving a specific purpose identified by 
the owner. 

21 Martin, S.  (2007) “Trusts in  American law and some  of their substitutes in Spanish law: Part II”,  Trusts  & 
Trustees, Vol. 13, No. 7, p. 242-251. 
22 van Veen, W. J.M. and Duin, H. M.C. (2016) “Dutch Trusts and Trust-Like Arrangements”, European Review 
of Private Law, 6-2016, p. 973–994 
23 See Sandor (2016)  

 
 
 
 
 
 
 
                                                 
III.2.b  Treuhand 

Treuhand are among the legal arrangements explicitly identified as being similar to trusts in 
both  FATF  standards  and  the  AMLD.  The  Treuhand  is  a  legal  arrangement  without  legal 
personality derived from the principle of the autonomy of the contracting parties, typical of 
the  German  and  Austrian  legal  systems.  According  to  this  scheme,  a  person  (Treugeber) 
transfers certain assets or ownership rights to another person (Treuhänder), who is authorised 
to  manage  such  assets  in  accordance  with  the  contract  between  the  two  parties.  Such  a 
contractual relationship can fulfil different functions. Most commonly, as also recognised by 
the OECD24, it serves the purpose of an escrow agreement. This suggests that these types of 
Treuhand should not be considered similar to trusts. 

However, due to its flexibility, the Treuhand can also be structured in such a way as to play a 
function similar to a trust. This can be the case, for example, of a Treuhand used to transfer 
and manage company shares25. The OECD26 confirmed the AML/CFT relevance of this type 
of  Treuhand  and  noted  that  it  should  be  subject  to  transparency  obligations  as  regards 
beneficial ownership.  

The Treuhand was not notified by any Member State. Member States pointed to the lack of 
comparability between the Treuhand and a trust, especially given that the Treuhänder cannot 
keep the assets separate from its own patrimony and that the arrangements is most commonly 
used as an escrow relationship.  

Literature indicates that the Treuhand presents features similar to trusts, even notwithstanding 
some structural differences intrinsic to the civil law origin of the Treuhand. The common use 
of Treuhand as escrow relationships is also acknowledged. Yet, as noted above, this does not 
appear the only function that a Treuhand can exercice, as it could also serve as for example a 
private wealth management mechanism.27 The information above, alongside the fact that both 
Austria  and  Germany  introduced  the  obligation  for  Treuhand  holding  company  assets  to 
disclose  their  beneficial  ownership,  suggests  that  Treuhände  should  be  considered  legal 
arrangements similar to trusts. 

III.2.c  Fideicomiso 

The  fideicomiso  is  among  the  legal  arrangements  explicitly  identified  as  being  similar  to 
trusts  in  both  FATF  standards  and  the  AMLD.  This  arrangement  is  most common  in  Latin 
America,  where  it  is  equivalent  to  the  inter  vivos  common  law  trust.  Given  its  geographic 
specificity, this arrangement is not relevant for the EU. 

24  OECD  –  Global  Forum  for  Transparency  and  Exchange  of  Information  for  Tax  Purposes  –  Peer  Review 
Report on Exchange of Information on Request – Austria 2018 
25  In  these  cases,  both  Austria  and  Germany  inserted  provisions  under  their  national  laws  to  provide  for  the 
disclosure  of  the  parties  to  the  Treuhand.  For  example,  the  Austrian  beneficial  ownership  register  for  legal 
entities  provides  information  on  the  Treugeber  and  the  Treuhänder  when  Treuhand  own  more  than  25%  of  a 
legal entity. 
26  OECD  –  Global  Forum  for  Transparency  and  Exchange  of  Information  for  Tax  Purposes  –  Peer  Review 
Report on Exchange of Information on Request – Austria and Germany 2018  
27 See Schmidt (2016). 

 
 
 
 
 
 
 
 
                                                 
Other  legal  arrangements  in  the  EU  share  the  same  origin  of  the  fideicomiso  in  the  Latin 
fideicommissum  (e.g.  the  fideicommis,  fedecommesso,  familienfideikommis).  In  most  cases, 
these arrangements have either been abolished or only allow legal guardians to look after the 
assets  of  a  minor  or  developmentally  disabled  person.  Literature28  recognises  that  these 
arrangements,  where  a  testator  identifies  a  guardian  who  will  manage  certain  assets  for  the 
benefit of a beneficiary, present structural similarities with common law trusts. They should 
therefore fall under the scope of Article 31. However, none of these arrangements has been 
notified by Member States. 

On the other hand, in  the case of  fideicommissary  substitution or arrangements such as the 
residual  fideicommissum,  the  asset  recipient  is  the  sole  proprietor,  and  the  assets  (or  the 
remainder) are passed on to a beneficiary only upon his/her death. In these cases, the person 
managing  the  assets  can  benefit  from  their  property  in  full,  without  the  limitations  that 
usually characterise a fiduciary agreement. Thus, such an arrangement fails to replicate either 
the structure or the function of the trust of separating title to, or management of, certain assets 
from  their  beneficial  ownership.  The  (possible)  residual  title  to  the  assets  of  a  further 
beneficiary  has  no  impact  on  the  arrangement,  as  it  takes  effect  only  upon  the  first 
beneficiary’s  death.  Thus,  as  noted  by  several  Member  States,  it  appears  that  these 
arrangements should not be considered similar to trusts.  

III.2.d  Svěřenský fond   

The svěřenský fond was  notified by the Czech Republic (Section 1448 et  seq. of the Czech 
Civil  Code).  It  is  a  sui-generis  legal  arrangement  that  finds  no  similarities  in  other  EU 
Member States. Under this legal arrangement, neither the settlor nor the trustee hold a title to 
the assets. These assets become property without owner, to be managed by the trustee for the 
benefit  of  the  beneficiaries.  Notwithstanding  its  specificities,  this  arrangement  fulfils  the 
same function of the common law trust of separating legal and beneficial ownership.29  

III.2.e  Funds 

EU  rules  on  investment  funds  are  not  prescriptive  as  regards  the  legal  structure  that  such 
funds might take. As a result, investment funds might take the form of investment companies, 
trusts or similar legal arrangements. Investment funds share functional similarities with trusts 
in that, through these arrangements, the investors relinquish their right of decision over them 
to a specialised professional.30 One Member State notified funds that fall under this typology, 
namely  the  Netherlands,  which  reported  the  fonds  voor  gemene  rekening  (Article  2  of  the 
Corporate Tax Act of 1969), a specific type of close-ended fund. 

Other Member States have opted for specific approaches for investment funds. For example, 
Luxembourg  requires  the  fonds  communs  de  placement  and  the  sociétés  d’investissement  à 

28  Honoré  T.  (2008)  “On  Fitting  Trusts  into  Civil  Law  Jurisdictions”,  University  of  Oxford  Legal  Research 
Paper Series, Paper No 27/2008 
29 See Sandor (2016) 
30 Kulms, R. (2016) “Trusts as Vehicles for Investment”, European Review of Private Law, 6-2016 (1091–1118) 

 
 
 
 
 
 
 
 
                                                 
capital  variable  to  disclose  their  beneficial  ownership  under  Article  30  of  the  AMLD.  The 
information  available shows that there is  no common approach to  funds (including pension 
funds),  and  that  questions  remain  on  how  to  deal  with  those  funds  that  take  a  contractual 
form.  

III.2.f  Foundations 

Foundations are regarded as the civil law equivalent to a common law trust, as they may be 
used for similar purposes31. The AMLD reflects this equivalence and imposes on foundations 
the  same  beneficial  ownership  requirements  as  on  trusts  and  similar  legal  arrangements. 
However, foundations have legal personality and, as such, they cannot fall under the category 
of  similar  legal  arrangements  to  trusts.  Only  one  notification  of  foundations  with  legal 
personality was made, which has since been withdrawn. 

Germany  notified  the  nichtrechtsfähige  Stiftungen,  a  type  of  foundation  without  legal 
personality,  provided  that  the  purpose  of  such  foundations  is  to  serve  the  interests  of  the 
founder, and “other legal structures which correspond to such foundations in their structure 
and  function”.  In  the  OECD’s  analysis,  the  nichtrechtsfähige  Stiftungen,  regardless  of  their 
purpose,  may  be  treated  as  a  Treuhand.  This  justifies  the  notification  of  this  arrangement, 
although the information available is not sufficient to justify its restriction to cases where the 
foundation serves the interests of the founder only. The notification of “other legal structures 
which  correspond  to  such  foundations  in  their  structure  and  function”  seems  too  vague  to 
achieve the objective of the AMLD,32 which is to ensure legal certainty and a level playing 
field by clearly setting out which legal arrangements established across the Union should be 
considered similar to trusts.  

III.3  Other legal arrangements 

Literature identifies also legal arrangements that can be considered similar to trusts by virtue 
of  their  structure,  such  as  the  guardianship,  the  curatorship  and  the  administratorship  of 
deceased estates. However, these arrangements have not been notified by Member States.  

On the other hand,  as acknowledged by the FATF, a number of other arrangements can be 
used to conceal the relationship between the beneficial owner and the assets,33 but cannot be 
considered  similar  to  trusts  as  regards  their  structure  and  function.  Examples  of  such 
arrangements are: 

-  Life  insurance  contracts  can  be  regarded  as  fulfilling  a  similar  function  to  that  of  a 
trust.34  However,  specific  provisions  concerning  these  products  already  exist  in  the 

31 FATF (October 2006), The misuse of corporate vehicles, including trust and company service providers 
32 Recital 29 of Directive (EU) 2018/843 
33 FAFT and Egmont Group (July 2018), Concealment of Beneficial Ownership 
34 Ibid 

 
 
 
 
 
 
 
 
 
                                                 
AMLD as well as in the Solvency II Directive,35 and these contracts should therefore be 
treated separately. 

-  Escrow  agreements  are  drawn  up  to  determine  the  details  of  a  transfer  of  assets 
procedure. The escrow agent acts as a guarantor for both parties in the transaction and is 
not, himself, party to it.  

-  Nominees acts on instructions regarding certain  assets, on behalf of a beneficial owner. 
The  transfer  of  assets  requires  a  trust,  a  similar  legal  arrangement  or  civil  contract  to 
govern the nominee relationship. 

-  For  other  arrangements  such  as  silent  partnerships,  the  information  available  is  not 

conclusive as to whether these should be considered similar to trusts or not.  

IV. Submission of legal arrangements to the obligations of the AMLD 

Article 31 of the AMLD provides that trustees or persons holding an equivalent position in a 
similar legal arrangement shall be made subject to a set of obligations concerning the holding 
and the submission of beneficial ownership information. Regarding the enforcement of such 
obligations,  an  overview  of  the  Member  States’  notifications  offers  a  fragmented  picture, 
which reflects the complexity of identifying and classifying the legal arrangements at hand.  

The  summary  below  is  based  on  information  collected  from  Member  States  prior  to  the 
deadline  for  transposition  of  the  5th  Anti-Money  Laundering  Directive36,  or  shortly  after  it. 
These  contributions  did  not  always  include  applicable  legal  provisions  and  cannot  fully 
reflect whether Member States have correctly transposed the provisions of Article 31 of the 
AMLD. Any failure to transpose them correctly by Member States will be dealt with using 
the appropriate procedures. 

Member  States  which  notified  that  trusts  or  similar  legal  arrangements  are  governed  under 
their  law  have  generally  adopted  legislation  that  obliges  these  arrangements  to  obtain  and 
hold adequate information on beneficial ownership. In a few Member States, such legislation 
has  not  yet  entered  into  force.  Such  obligations  generally  fall  on  the  trustee,  and,  in  some 
cases, it is specified that the information shall include the identity of the participants in the 
trust  in  line  with  Article  31  of  the  Directive.  Most  of  the  above  Member  States  apply  the 
same  obligations  also  to  other  legal  arrangements  similar  to  trusts.  In  some  cases,  these 
arrangements are spelled out (e.g. fiducies).  

As  regards  Member  States  that  indicated  they  do  not  have  any  trusts  or  similar  legal 
arrangement  governed  under  their  legal  systems,  most  of  them  have  passed  legislation  that 
requires  foreign  trusts  and  similar  legal  arrangements  to  obtain  and  report  appropriate 
information on beneficial ownership. In general, the broadness and ambiguity of notifications 
suggests difficulties in addressing the different types of relevant legal arrangements. In some 

35 Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up 
and pursuit of the business of Insurance and Reinsurance (Solvency II) (Text with EEA relevance), OJ L 335, 
17.12.2009, p. 1–155. 
36 Directive (EU) 2018/843 (see footnote 1).  

 
 
 
 
 
 
 
                                                 
cases, information  regarding the obligations imposed on foreign trusts is  unclear, imprecise 
(e.g. reference to legal persons instead) or missing. 

As  regards  reported  sanctions  and  other  dissuasive  measures  for  failure  to  obtain  and  hold 
adequate  information  on  beneficial  ownership,  the  information  shared  by  Member  States 
shows  a  fragmented  picture.  Generally,  Member  States  requiring  trusts  and  similar  legal 
arrangements to obtain beneficial ownership information lay down pecuniary sanctions of an 
administrative  nature  (e.g.  lump  sums,  fines  calculated  per  day).  The  amounts  vary 
considerably  (from  a  few  thousand  euro  to  up  to  one  million  or  more)  and  can  be  set  or 
incremented  based  on  different  parameters.  A  minority  of  Member  States  also  reported 
sanctions at criminal level, including imprisonment, although it appears unclear whether the 
information  provided  actually  refers  to  registration  requirements  for  businesses  in  general 
rather  than  to  the  submission  of  beneficial  ownership  information.  Similar  considerations 
apply for measures such as prohibition to operate or removal from the company register. In a 
few cases, failure to comply with national rules on transparency and registration obligations 
will lead to the nullity of such arrangements. 

Member States that introduced rules obliging trusts and similar legal arrangements to obtain 
and hold information on beneficial ownership also required them to disclose such information 
to  obliged  entities.  However,  Member  States’  approaches  appear  fragmented  in  this  regard. 
Several Member States reported national legislation that reflects the provisions of Article 31 
of  the  AMLD.  In  some  cases,  Member  States  only  indicated  that  trusts  obliged  to  submit 
beneficial ownership information are those entering into business activity in the State at hand, 
without pointing out the aspect of the residence of the trustee, which, thus, remains unclear. 
Finally,  in  other  cases  Member  States  provided  general  or  inaccurate  information  that  does 
not address the specific situation of trusts or similar arrangements.  

The majority of Member States did not provide sufficient information to form a clear picture 
on the obligation for trusts resident in another Member State to submit proof of registration 
when  doing  business  in  their  territory.  In  several  cases,  input  on  this  point  was  either  too 
general  (e.g.  it  referred  to  the  interconnection  of  national  central  beneficial  ownership 
registers, due by March 2021), unclear, missing, or indicating that the relevant legislation has 
not yet entered into force.  

V.  Conclusions 

There is no conclusive analysis in the international AML/CFT community of what constitutes 
a  similar  legal  arrangement  to  a  trust.  This  report  provides  a  first  attempt  at  EU  level  to 
analyse legal  arrangements  that could  be considered similar to  the common law trust  under 
Member  States’  law  and  custom,  based  on  the  input  by  the  Member  States  and  analyses 
produced by the academic world. 

The  analysis  reveals  that  a  wide  range  of  arrangements  show  similarities with  the  common 
law trust in line with the conditions of Article 31 of the AMLD. Legal arrangements such as 
Treuhand or Fiducie, on the one hand, can be considered similar to trusts by virtue of their 

 
 
 
 
 
 
 
 
function, whereas other arrangements such as guardianship, curatorship and administratorship 
of deceased estates can be considered similar by virtue of their structure.  

Member States’ notifications under Article 31(10) of the AMLD did not include all the above 
arrangements,  reflecting  the  lack  of  a  common  approach  to  what  features  define  similarity 
with the common law trust. These notifications can therefore only provide a first attempt at 
identifying what similar arrangements to trusts are governed under Member States’ law.  

At the same time, such absence of a common approach to the identification of arrangements 
similar  to  trusts  does  not  ensure  legal  certainty  and  a  level  playing  field,  and  might  leave 
loopholes that allow little known arrangements to be used in money laundering schemes, as 
has been the case with legal entities.37 To tackle this problem, the Commission will consider 
the  possibility  of  setting  up  an  informal  working  group  with  academics,  practitioners, 
Financial Intelligence Units and competent authorities in order to identify common objective 
and consistent criteria for the identification of the relevant legal arrangements governed under 
their law. Such an exercise could result in the issuance of a technical document.  

In addition, a preliminary analysis of the obligations imposed on such legal arrangements by 
Member  States  shows  that  the  aim  of  establishing  a  consistent  monitoring  and  registration 
framework might not have been achieved yet.  

At  the  same  time,  the  review  reveals  that  in  the  area  of  funds,  transparency  of  beneficial 
ownership  information  might  vary  from  one  Member  State  to  another  based  on  their  legal 
form. This creates an uneven level of transparency, which might merit being addressed with 
common  specific  rules  for  funds,  similarly  to  what  the  AMLD  already  provides  for 
foundations.  

37  https://www.globalwitness.org/en/blog/three-ways-uks-register-real-owners-companies-already-proving-its-
worth/