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Transparent to the Bone

In March, the European Parliament passed in the first reading an amendment to the original draft AML Directive, which requires Member States to establish registers of legal entities and trust structures in which the end owners and beneficiaries will be listed. The information is to be available to the public. This means that not only major (at least 25%) shareholders but also beneficiaries of private foundations, trusts and similar structures will be disclosed.  KŠB lawyer Vlastimil Pihera comments on the draft as follows:

This requirement would substantially increase the information listed today in the Companies Register and the Register of Foundations and would require establishing a Trust Register and a Register of Trust Succession Assets as well.

However, the most controversial issue is that the EU requirements will impact property institutes that manage family assets and resolve inheritance and other sensitive issues. The duty to disclose and make such information publically available is not supported by any clear argument that would justify such an invasion of privacy. Especially in terms of trusts, the requirement is comparable to requiring that bank account balances be made available to the public.

Although there may be a certain amount of understanding for the political appeal of the idea of full transparency, the requirement must always be corrected by the right to privacy as a fundamental right to a life of freedom. Transparent walls in our homes will not make anyone happier. Remember, the concept of modern civic society (which European culture still claims (at least formally) to be a part of) was born in a city. The city environment had liberating effects not only thanks to the city infrastructure but primarily because it offered anonymity, which was utterly inconceivable in the country and which provided room for freedom.

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