Wednesday, June 26, 2013
The French Finance Ministry has published its national Action Plan for enhancing tax transparency and preventing the misuse of companies and other vehicles, including trusts, as part of its commitments to the G8 group of industrialized nations.
Underlining the importance of combating tax evasion and tax fraud, as well as money laundering and terrorism financing, France unveiled details of its firm commitments to ensuring the transparency of the beneficial ownership of companies, other vehicles and trusts, which involves identifying who effectively controls and takes profit from a company or a legal arrangement.
To this end, the French Government aims to issue France's new National Risk Assessment on Money Laundering and Terrorism Financing, in accordance with the Financial Action Task Force (FATF) recommendation, by the end of 2014. This includes assessing the proper risks associated with different types of legal persons and other vehicles established in France.
It intends to assess France's central public registry for companies (Registre du Commerce et des Sociétés – RCS), in terms of its efficiency at providing adequate, accurate, and current information, and propose and implement means to improve the situation if necessary, including other means to ensure access to beneficial ownership for the administrative authorities.
The Government also undertakes to continue to ensure comprehensive and effective legislation regarding trusts and other similar legal arrangements. France's legislation and regulation regarding the identification and taxation of the beneficial owners of trusts is provided for under Article 14 of the July 2011 supplementary finance law, and completed by the decree from September 14, 2012.
Furthermore, France pledges to evaluate mechanisms to ensure that competent authorities have access to information regarding other corporate vehicles and financial instruments and to improve them if appropriate.
The Government commits to reviewing the consistency of the application of the current anti-money laundering and counter-terrorist financing obligations imposed on both financial institutions and designated non-financial businesses and professions, including trusts and company service providers, to identify and verify the beneficial ownership of their customers, and to assess the need to extend or improve the obligations.
In addition, the Government aims to strengthen the legal framework and sanctions regarding the fight against corruption, tax evasion, and tax fraud, for instance in the case of the misuse of foreign entities and legal arrangements. To this end, two bills are currently being debated in parliament under an expedited procedure, namely the Government's anti-tax evasion bill and the organic bill relating to the special financial prosecutor (projet de loi relatif à la lutte contre la fraude fiscale et la grande délinquance économique et financière and projet de loi organique relatif au procureur de la République financier).
Finally, the Government stresses its commitment to promoting international cooperation on and comprehensive obligations for an effective exchange of basic and beneficial ownership information on companies, trusts and other legal entities.
During the latest G8 meeting in Northern Ireland, leaders signed a document setting out "core principles that are fundamental to the transparency of ownership and control of companies and legal arrangements." Its aim is to ensure that companies and trusts obtain and hold information on their beneficial ownership. It also calls for the establishment of central registries containing these details, at either national or state level, and for the robust enforcement of sanctions in cases of non-compliance.
Each G8 jurisdiction pledged to produce a national Action Plan, based on these principles and to publish updates on the progress made.