Art. 13 Identification and verification of beneficiaries of discretionary trusts | RTS on customer due diligence | AML

This article addresses a specific and technically complex area of beneficial ownership identification: discretionary trusts.

It builds directly on Article 22(5) of Regulation (EU) 2024/1624, specifying what obliged entities must obtain from the trustee of a discretionary trust.

The core challenge with discretionary trusts is that beneficiaries may not yet be identified or even identifiable, so this article focuses on understanding who holds discretionary power, how it can be exercised, and whether it has been exercised, in order to determine who the true beneficial owners are.

Important points:

Obtain details from the trustee on the objects of a power and default takers, along with supporting documents to confirm that information is correct and up to date.
Apply risk-sensitive measures to understand how discretionary power can be exercised by the trustee(s), and whether beneficiaries have already been appointed or whether default takers have assumed that role.
Ensure the trustee provides timely updates on material events that may cause beneficiaries to become ascertainable and therefore qualify as beneficial owners.

1. For the purposes of Article 22(5) of Regulation (EU) 2024/1624, the information obliged entities shall obtain from the trustee of the discretionary trust includes:
  1. details on the objects of a power and default takers, to establish whether it is a class of natural or legal persons or if the natural or legal persons are already identified;
  2. relevant documents to enable the obliged entity to establish that these details are correct and up to date.
1. To comply with paragraph 1, obliged entities shall take risk-sensitive measures to:
  1. obtain sufficient information about how and in which ways the power of discretion can be exercised by the trustee(s);
  2. establish whether trustees have exercised their power of discretion and appointed one or more beneficiaries from among the objects of a power, or whether the default takers have become the beneficiaries due to the trustees’ failure to exercise their power of discretion.
1. Obliged entities shall take risk-sensitive measures to ensure that the trustee provides timely updates, including on specific material events that may lead to beneficiaries to become ascertainable and thus beneficial owners.

Article 13 Identification and verification of beneficiaries of discretionary trusts

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