TITLE X: ANTI-MONEY LAUNDERING AND COUNTER TERRORIST FINANCING
Article LAW.AML.127: Objective
The objective of this Title is to support and strengthen action by the Union and the United Kingdom to prevent and combat money laundering and terrorist financing.
Article LAW.AML.128: Measures to prevent and combat money laundering and terrorist financing
1. The Parties agree to support international efforts to prevent and combat money laundering and terrorist financing. The Parties recognise the need to cooperate in preventing the use of their financial systems to launder the proceeds of all criminal activity, including drug trafficking and corruption, and to combat terrorist financing.
2. The Parties shall exchange relevant information, as appropriate within their respective legal frameworks.
3. The Parties shall each maintain a comprehensive regime to combat money laundering and terrorist financing, and regularly review the need to enhance that regime, taking account of the principles and objectives of the Financial Action Task Force Recommendations.
Article LAW.AML.129 Beneficial ownership transparency for corporate and other legal entities
1. For the purposes of this Article, the following definitions apply:
(a) “beneficial owner” means any individual in respect of a corporate entity who, in accordance with the Party’s laws and regulations:
(i) exercises or has the right to exercise ultimate control over the management of the entity;
(ii) ultimately owns or controls directly or indirectly more than 25% of the voting rights or shares or other ownership interests in the entity, without prejudice to each Party’s right to define a lower percentage; or
(iii) otherwise controls or has the right to control the entity;
In respect of legal entities such as foundations, Anstalt and limited liability partnerships, each Party has the right to determine similar criteria for identifying the beneficial owner, or, if they choose, to apply the definition set out in point (a) of Article AML.130(1) [Beneficial Ownership transparency of legal arrangements], having regard to the form and structure of such entities.
In respect of other legal entities not mentioned above, each Party shall take into account the different forms and structures of such entities and the levels of money laundering and terrorist financing risks associated with such entities, with a view to deciding the appropriate levels of beneficial ownership transparency.
(b) “basic information about a beneficial owner” means the beneficial owner’s name, month and year of birth, country of residence and nationality, as well as the nature and extent of the interest held, or control exercised, over the entity by the beneficial owner;
(c) “competent authorities” means:
(i) public authorities, including Financial Intelligence Units, that have designated responsibilities for combating money laundering or terrorist financing;
(ii) public authorities that have the function of investigating or prosecuting money laundering, associated predicate offences or terrorist financing, or that have the function of tracing, seizing or freezing and confiscating criminal assets;
(iii) public authorities that have supervisory or monitoring responsibilities aimed at ensuring compliance with anti-money laundering or counter terrorist financing requirements.
This definition is without prejudice to each Party’s right to identify additional competent authorities that can access information about beneficial owners.
2. Each Party shall ensure that legal entities in its territory maintain adequate, accurate and up- to-date information about beneficial owners. Each Party shall put in place mechanisms to ensure that their competent authorities have timely access to such information.
3. Each Party shall establish or maintain a central register holding adequate, up-to-date and accurate information about beneficial owners. In the case of the Union, the central registers shall be set up at the level of the Member States. This obligation shall not apply in respect of legal entities listed on a stock exchange that are subject to disclosure requirements regarding an adequate level of transparency. Where no beneficial owner is identified in respect of an entity, the register shall hold alternative information, such as a statement that no beneficial owner has been identified or details of the natural person or persons who hold the position of senior managing official in the legal entity.
4. Each Party shall ensure that the information held in its central register or registers is made available to its competent authorities without restriction and in a timely manner.
5. Each Party shall ensure that basic information about beneficial owners is made available to any member of the public. Limited exceptions may be made to the public availability of information under this paragraph in cases where public access would expose the beneficial owner to disproportionate risks, such as risks of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation, or where the beneficial owner is a minor or otherwise legally incapable.
6. Each Party shall ensure that there are effective, proportionate and dissuasive sanctions against legal or natural persons who fail to comply with requirements imposed on them in connection with the matters referred to in this Article.
7. Each Party shall ensure that its competent authorities are able to provide the information referred to in paragraphs 2 and 3 to the competent authorities of the other Party in a timely and effective manner and free of charge. To that end, the Parties shall consider ways to ensure the secure exchange of information.
Article LAW.AML.130 Beneficial ownership transparency of legal arrangements
1. For the purposes of this Article, the following definitions apply:
(a) “beneficial owner” means the settlor, the protector (if any), trustees, the beneficiary or class of beneficiaries, any person holding an equivalent position in relation to a legal arrangement with a structure or function similar to an express trust, and any other natural person exercising ultimate effective control over a trust or a similar legal arrangement;
(b) “competent authorities” means:
(i) public authorities, including Financial Intelligence Units, that have designated responsibilities for combating money laundering or terrorist financing;
(ii) public authorities that have the function of investigating or prosecuting money laundering, associated predicate offences or terrorist financing or the function of tracing, seizing or freezing and confiscating criminal assets;
(iii) public authorities that have supervisory or monitoring responsibilities aimed at ensuring compliance with anti-money laundering or counter terrorist financing requirements.
This definition is without prejudice to each Party’s right to identify additional competent authorities that can access information about beneficial owners.
2. Each Party shall ensure that trustees of express trusts maintain adequate, accurate and up- to-date information about beneficial owners. These measures shall also apply to other legal arrangements identified by each Party as having a structure or function similar to trusts.
3. Each Party shall put in place mechanisms to ensure that its competent authorities have timely access to adequate, accurate and up-to-date information about beneficial owners of express trusts and other legal arrangements with a structure or function similar to trusts in its territory.
4. If the beneficial ownership information about trusts or similar legal arrangements is held in a central register, the State concerned shall ensure that the information is adequate, accurate and up-
to-date, and that competent authorities have timely and unrestricted access to such information. The Parties shall endeavour to consider ways to provide access to beneficial ownership information about trusts and similar legal arrangements to individuals or organisations who can demonstrate a legitimate interest in seeing such information.
5. Each Party shall ensure that there are effective, proportionate and dissuasive sanctions against legal or natural persons who fail to comply with requirements imposed on them in connection with the matters referred to in this Article.
6. Each Party shall ensure that its competent authorities are able to provide the information referred to in paragraph 3 to the competent authorities of the other Party in a timely and effective manner and free of charge. To that end, the Parties shall consider ways to ensure the secure exchange of information.