INTRODUCTION Contributed by: Basil Zirinis and Elizabeth Kubanik, Sullivan & Cromwell LLP
journalists, civil society organisations and similar) have access to registers of ownership information. Prior to the adoption of 5AMLD, the United Kingdom had already enacted similar legislation in the context of shareholders of corporations, which requires the disclosure of persons with significant control. Since 2016, all UK-incorporated companies and limited liability partnerships (LLPs) have been required to maintain a register of natural persons with significant control, held open for public inspection. Further - more, since 2018, UK-resident trusts and trusts with UK assets or income have been required to provide information for inclusion in the UK register of trusts. In response to 5AMLD, the UK expanded the register of trusts to include additional categories of non-UK trusts with connections to the UK, such as trusts that enter into a business relationship with a business that is subject to the UK’s anti-money laundering regime. Such trusts were required to be registered by Sep - tember 2022. In line with EU regulations, the register – which was previously available only to government institutions – is now available to persons with a “legiti - mate interest”. The EU has also indirectly imposed transparency obli - gations on offshore jurisdictions through the publica - tion of a list of non-co-operative tax jurisdictions. In February 2025, the “blacklist” contained 11 non-co- operative jurisdictions, including several US territo - ries. Numerous offshore jurisdictions have adopted (or have announced plans to adopt) local laws and regulations that implement the provisions of DAC6 and 5AMLD. These developments coincide with the increas - ing criminalisation of tax and compliance advice. In recent years, the UK Criminal Finances Act, the US Foreign Corrupt Practices Act and similar laws have threatened private client advisers with criminal penal - ties for their clients’ misconduct, effectively co-opting them into the oversight of client behaviour. Under the UK Criminal Finances Act, a corporate body (eg, a law firm or a financial institution) that fails to insti - tute policies designed to prevent the facilitation of tax offences or money laundering by its employees could
itself be subject to substantial fines or the termination of licences. In the USA, new reporting requirements under the Corporate Transparency Act came into effect in Janu - ary 2024, as part of the Anti-Money Laundering Act of 2020, requiring corporations, limited liability compa - nies and similar entities to disclose beneficial owner - ship information to the US Department of the Treas - ury Financial Crimes Enforcement Network (FinCEN). Under the regulations, a beneficial owner includes any individual who, directly or indirectly, either exercises substantial control over a reporting company, or owns or controls at least 25% of the ownership interests of a reporting company. The information reported to FinCEN would not be publicly available but would be accessible by certain law enforcement agencies, reg - ulatory agencies, financial institutions (in certain cir - cumstances) and Department of Treasury personnel. However, in March 2025, FinCEN took significant steps to limit reporting requirements, issuing an inter - im final rule that removed the requirement for US com - panies and US persons to report. Under the interim final rule, the definition of “reporting company” now only includes foreign companies that are registered to do business in any US state or tribal jurisdiction, and such foreign companies are not required to report any US persons as beneficial owners. The final rule is expected in the second half of 2025. The substantial reporting burdens imposed by these types of regulations have had a notable impact on the offshore trust world. Many smaller trust companies simply do not have the resources to comply with the complex regulations, and the risks of incorrect report - ing often outweigh the benefits of taking on clients from certain jurisdictions. Some commentators have questioned the privacy implications, as well as the efficacy and fairness of the burden placed by these expansive transparency and oversight frameworks upon individuals, families and advisers. In particular, practitioners are increasingly challenging the requirement that court proceedings relating to trust administration or related intra-family matters be kept open to the public where not spe - cifically requested by the parties. These proceedings
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