Alert

A new French registry of trusts has been set-up!

Following the recent decision of the French constitutional court to fully ban the French public registry of trusts having ties with France set up by French lawmakers in 2013, the French Government has implemented a new registry of trusts by order dated December 1st 2016.

The former French public registry of trusts aimed at allowing anyone having a French tax identification number to have access to the information about those trusts for which trustees have complied with their reporting obligations in France.

For the record, the former registry was banned because its public nature had been considered as a disproportionate infringement to the right to privacy. Indeed the public access could not be viewed as improving the fight against tax fraud and evasion.

A registry which access is restricted to a limited circle of persons

In the order setting-up the new registry, the French government defines the scope of the persons and institutions having access to it. Contrary to the former registry, access to the new registry is restricted to certain French stakeholders of the fight against money laundering and financing of terrorism.

The persons and institutions entitled to have access to the registry are:

  • The French anti-money laundering agency (TRACFIN);
  • French judicial authorities;
  • Certain qualified employees of the French tax administration and the French administration of customs;
  • The French “Autorité de contrôle prudentiel et de résolution” (French insurance authority) and the French “Autorité des marchés financiers” (French equivalent of the Security Exchange Commision);
  • Certain professionals subject to anti money-laundering regulation in France (e.g. notaries, lawyers, bailiffs, auctioneers,  financial, financial institutions).

It seems to us that the restriction of the scope of the persons having access to the new French registry of trusts tends to comply with the limits provided by the French constitutional court in order to insure the protection the right to privacy.

A registry which content is more important and sensitive than the former public registry of trust

The information contained in the public registry of trusts banned by the French constitutional court were restricted to the identity of the trustees, settlors, beneficiaries and “beneficiaries deemed settlors” of trusts having ties with France. The content of the new registry of trusts would be probably much more important and sensitive than the former one, as the registry aims at collecting all the information reported in the French trusts returns filed by trustees of trusts having ties with France, including the value of assets held in trust as January 1st of each year.

A decree should be issued by the French Government very soon in order to bring precisions concerning the modalities and more specifically the condition of access to such registry.

Link to the Court order! Link to the QPC decision!

Posted on 13 December 2016 in Alert

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