INTRODUCTION Contributed by: Basil Zirinis, Elizabeth Kubanik and Megan Eitel, Sullivan & Cromwell LLP
cuts and the imposition of tariffs, impacting private clients with multi-jurisdictional wealth. Recent years have continued to see increased political volatility worldwide, highlighted by the reintroduction of broad-scale tariffs in international trade, a rise in nationalism and the continued consolidation of author - itarian regimes around the globe. The socio-economic fallout resulting from the pandemic, mounting interna - tional conflicts and other societal forces has increased worldwide political turmoil and, in some cases, civil unrest. The risk of nationalisation has increased, and continues to create the need to ensure that private clients separate personal wealth from ownership of companies that can be nationalised, which may prove difficult given that a family’s wealth is often predomi - nantly tied up in its family business. Private client advisers will need to keep abreast of any shifts in power and associated policy to continue to effectively counsel their clients in the face of political change. The global economy The evolving geopolitical landscape and ongoing global conflicts, combined with persistent inflation, high global interest rates and turbulent economic mar - kets, continue to generate concern regarding global economic growth. This concern has been further fuelled by escalating global trade tensions and the return of broad-scale tariffs. The political and eco - nomic policies implemented following the landmark elections of 2024 have continued to shape the global economy through 2025 and into 2026. All of these factors have dramatic consequences for clients and their business interests. Demand for increased transparency and oversight The global drive for transparency continues to be a dramatic force of change in the international private client world. Governments are increasingly focused on cross-border arrangements and structures, and have implemented regulatory schemes that require the exchange of tax-related information. For example, the USA has achieved near-complete international com - pliance with the Foreign Account Tax Compliance Act (FATCA).
The Common Reporting Standard (CRS – the recipro - cal automatic information exchange agreement devel - oped by the OECD) has been adopted in over 100 jurisdictions and requires entities (including trusts and foundations) to report information on controlling per - sons. For entities, the controlling persons are gener - ally the individuals who exercise control over the entity or who have a direct or indirect controlling ownership interest in the entity. For a trust, the controlling per - sons are defined to include the settlors, the trustees, the protectors (if any), the beneficiaries or class of beneficiaries, and any other natural persons exercis - ing ultimate effective control over the trust (whether directly or indirectly). Of course, few of these individuals (who may be resi - dent in numerous jurisdictions) actually control a trust, yet the broad reporting requirements create significant compliance burdens and challenges for trustees and financial institutions dealing with trusts. The global reach of the CRS has also made the co-operation of teams of advisers across multiple relevant jurisdic - The European Union has expanded the scope of man - datory disclosure beyond the CRS with the adoption of DAC6, a European Directive requiring tax, account - ing and legal professionals (“intermediaries”) to report their clients’ qualifying cross-border planning arrange - ments. Any cross-border arrangement involving one of a number of specified “hallmarks” is subject to disclosure. The implementation of DAC6 varies by jurisdiction. DAC6 is retroactive to 25 June 2018, which means that intermediaries and their clients may already have substantial reporting obligations under the disclosure regime. In addition to increased emphasis on the automatic exchange of information in programmes that purport to make the information available only to tax and law enforcement authorities, some governments and organisations have moved for even greater transpar - ency, demanding public registers. For instance, in July 2018 the European Parliament and Council adopted the fifth Anti-Money Laundering Directive (5AMLD), which broadened the availability of EU member states’ national registers of ultimate beneficial ownership of tions that much more important. Expansion of mandatory disclosure
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