From the Brussels office

Split emerges on money laundering trust rules

A difference has emerged between the EU Parliament and Council in relation to the proposed Fourth Directive on Money Laundering and its effect on trusts. It relates to the proposed requirement for member states to maintain publicly available ultimate beneficial ownership (UBO) registers for both corporate entities and trusts, which is opposed by
the UK Law Societies as having unfortunate unintended consequences for citizens’ privacy in all member states, particularly in the UK.

Publicly available UBO registers for trusts remain mandatory under the European Parliament amendments to the proposed directive. However, there is no such requirement in the Council’s recently adopted position. The positions of these institutions are therefore far removed at present. This will make the position of the Commission crucial on entering trialogue negotiations. The Law Societies have drafted a letter to Commissioner Michel Barnier on the matter, encouraging the Commission to reject public UBO registers for trusts, as it had in its initial draft of the text. The negotiations begin in the autumn.

CJEU upholds lawyers’ freedom to move

In a judgment of 17 July 2014, the Court of Justice held that a national travelling to another country to obtain the qualification of lawyer before returning home to have that qualification registered, does not constitute an abuse of the right of establishment, as provided for in the Lawyers Directive.

It concerned two Italians who obtained degrees, in Italy and then Spain, and were admitted as lawyers by the Spanish bar. They returned to Italy and applied for registration as established European lawyers. The Italian Bar Council said they circumvented Italian regulations on access to the profession, and sought guidance from the CJEU on the scope to refuse access under the directive for abuse of the right.

The court stated that, while EU law may not be relied upon for abusive or fraudulent ends, in a single market the right of citizens to decide where to gain their title and where to practise law is an exercise of fundamental freedoms guaranteed in the Treaties. The manner in which the two Italians had acquired their title was in fact one of the objectives of the directive and did not constitute an abuse of the right of establishment.