News item | 01-04-2022 | 16:15
As a result of the illegal aggression in Ukraine, services by trust offices aimed at Russian money flows are prohibited. For example, there will be a ban on providing trust services to persons and companies that are established or an ultimate beneficial owner (UBO) resident in Russia or Belarus. This makes it more difficult to operate via the Netherlands. They can no longer be facilitated by trust offices in the Netherlands and must arrange the establishment, administration and management of the legal entity themselves. These measures should preferably be arranged at a European level. Because it is uncertain whether this will be possible in the short term, national emergency legislation is being prepared. On the proposal of the Minister of Finance Kaag, the Council of Ministers has approved this bill, which will be submitted to the Council of State for urgent advice. It is then submitted to the House of Representatives and the Senate. The ban obliges to terminate the service. It doesn’t lead to more freezes.
The bill also prohibits the provision of conduit companies and the provision of trust services involving the involvement of high-risk third countries in the field of money laundering or non-cooperative countries in the field of tax. Conduit companies are legal entities that belong to the trust office’s group and that are used to ‘flow through’ client funds, such as dividends or royalties, for tax purposes. It is therefore proposed to completely prohibit the professional or commercial use of conduit companies by trust offices. This measure was previously announced by the previous cabinet.
The Netherlands is one of the countries with a large trust office sector, although its size has declined due to stricter regulation. Trust offices provide services that help wealthy individuals or companies to structure their cash flows. Services such as providing a postal/visiting address to a company in combination with the provision of administrative services such as taking care of administration, legal advice or filing tax returns, or acting as a director for a company.