Information to be maintained by trustees in the creation of Express Trust in Sri Lanka

Information to be maintained by trustees in the creation of Express Trust in Sri Lanka

 

Despite the essential and legitimate role played by corporate vehicles (legal persons and legal arrangements such as companies, partnerships, foundations, trusts and other similar legal arrangements) in the economy, these could be misused for illicit purposes by criminal elements. The criminal misuse of legal persons and legal arrangements is often done with the purpose of circumventing anti-money laundering and countering terrorist financing (AML/CFT) measures. In this context, readily available legal ownership and beneficial ownership information relating to legal persons and legal arrangements would assist law enforcement authorities to track down criminal elements that misuse the corporate vehicles to further their illicit activities and launder criminal proceeds.

 

The Financial Action Task Force (FATF) Recommendations 24 and 25 specifically require countries to ensure that adequate, accurate and timely information on beneficial ownership is available to competent authorities that include supervisory and law enforcement authorities. With this in mind, the amendments are introduced to the laws governing trusts in Sri Lanka, the Trusts Ordinance, No. 9 of 1917, to mitigate the misuse of trusts in money laundering by increasing transparency of information relating to trusts created in Sri Lanka.

 

In terms of the Trusts (Amendment) Act, No. 6 of 2018 upon creation of an express trust under Section 6 of the Trusts Ordinance in relation to any immovable or movable property, the trustee of such trust is required to obtain and maintain information as specified in the Regulation.

 

Accordingly, the Trusts (Information Relating to Express Trusts) Regulations 2018, a regulation prescribing the information to be maintained by trustees was issued by the Minister of Justice byway of Gazette Extraordinary No. 2099/20, dated November 28, 2018.

 

According to these regulations, trustees are required to maintain, verify and update the following information relating to express trusts,

 

  1. Information about the trust ( name , address, purpose),
  2. Information about the author of trust, trustees and co-trustee/s ( name, identification, address etc)
  3. Information of the beneficiary/beneficiaries/ class of beneficiaries (name, identification, address
  4. Information of any other person engaged in the execution of the trust
  5. Information of any beneficial owners

 

At the same time, trustees are required to submit the information maintained above to the Registrar of Lands of the area, within which, the trust property is situated and to the Registrar General.

 

These measures have been taken to minimize the misuse of legal arrangements/ trust in money laundering by increasing the transparency of trusts created in Sri Lanka.

 

The Trust Ordinance (Amendment) Act and the Regulation issued can be downloaded from the links below,

 

 

 

 

Information to be maintained by trustees in the creation of Express - Notice to Public

 

Registrar General’s Department

Notice to the Public

Information to be maintained by trustees in the creation of Express Trusts

In terms of the trusts (Amendment) Act, No. 06 of the 2018 and as specified in the Trusts (Information relating to Express Trusts) Regulations 2019, Gazette Extraordinary No. 2108/10, dated January 28, 2019 upon creation of an express trust, the trustee is required to obtain and maintain following information:

  1. Particulars of the trust (name, address, District , Land Registry area applicable, purpose of the Trust)
  2. Author of trust, trustees and co-trustee/s (name, identification, address)
  3. Beneficiary/beneficiaries/class of beneficiaries (name, identification, address)
  4. Any person engaged in the execution of the trust other than those referred in 2 & 3 above (agent/ legal representative/ manager/ investment advisor/ tax advisor/ accountant)
  5. Beneficial owners when trust has been created for the benefit of a legal person

Trustees are also required to submit the information maintained above to

  • The Registrar of Lands (at trust property located)
  • The Registrar General

Existing trusts are required to obtain and report above information on or before July 28, 2019. Noncompliance with the above obligation is an offence punishable under the Trust Ordinance.

 

Registrar General

For further information you may contact,

Assistant Registrar General (Notary)
Registrar General Department
No. 234/A3, Denzil Kobbekaduwa Mawatha
Battaramulla
TP: +94 112889488/89
Fax : +94 112
889517