Tough new Trust laws to prevent money laundering, other crimes

The Trusts Ordinance will be amended to empower the Central Bank's Financial Intelligence Unit and other government authorities dealing with money laundering and terrorism financing to obtain information relating to any trust.

The new provisions will enable the Registrar General to maintain a register of trusts, information from which he will be required to provide if a written request is made by the FIU and affiliated institutes.

The amendments will enable the Registrar General to provide information on the trusts to the relevant authorities such as any public authority assigned with the responsibility of preventing, investigating or prosecuting money laundering and suppression of terrorist financing, and those seizing or freezing and confiscating assets relating to such offences.

Trustees will also be required to keep records of all such information such as details of the co-trusts, the author of the trust; the beneficiary, any other person engaged in the execution of the trust in the capacity of an agent, a legal representative, a manager, an investment advisor or a tax advisor, an accountant or otherwise.

This information will need to be verified and updated every three months, to the greatest extent possible.

Where a trust has been created for the benefit of a class of persons, all information on the identity of every person, will have to be kept in record.

In the event, a person’s involvement with the trust ceases to exist a trustee will be required to maintain records for six years, from the date of which it occurs.

Those who act in violation of the new provisions to the Ordinance will, upon conviction by a Magistrate, be liable to a fine of upto Rs 200,000 or a jail term of upto two years or both.

The Trust ( Amendment) Bill was published in the Government gazette by the Minister of Justice last week.