Express Trusts and Beneficial Ownership in the Financial Action Task Force Recommendations

This article examines the FATF’s definition of ‘beneficial owner’ in the common law trust context and the FATF Recommendations in which it operates as a mechanism to identify criminals and to seize and confiscate criminal assets. It concludes that the definition is fundamentally flawed in the trust context and is based on the erroneous notion that a common trust is a legal thing or entity similar to a company. This flaw explains, in large part, why most common law countries have difficulty effectively implementing the FATF Recommendations relevant to trusts. The author concludes that poor country compliance ratings will persist despite a new definition to be applied to trusts in the FATF’s next round of country evaluations commencing in 2024/2025.