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Dutch Trusts Urged To Check Paradise Papers

by Ulrika Lomas,, Brussels

30 November 2017

The Dutch Central Bank, De Nederlandsche Bank (DNB), has requested that trust offices check to see whether their clients are named in the so-called Paradise Papers.

The DNB made its request as the country's trust sector comes under increasing pressure to raise levels of transparency amid allegations that Dutch trust offices are used by companies and wealthy individuals to avoid tax.

"DNB expects each trust office to check the new database and test it against its own file with client relationships," the bank said in a statement published on November 29.

In the event that client names appear in the leaked data, trust offices must also "investigate why a relationship occurs" and how it relates to its own businesses, the bank said.

The DNB also requested that trust offices report their results.

The so-called Paradise Papers involve the leak of 13.4m files, shared by the International Consortium of Investigative Journalists (ICIJ). Much of the data focuses on the dealings of law firm Appleby and was made available to the public by the ICIJ on November 17.

The Government of the Netherlands intends to strengthen the regulatory regime for Dutch trust offices as part of its ongoing efforts to reduce tax avoidance and fraud.

Core elements of the proposed new supervision of trust offices legislation were announced last month by Minister of Finance, Wopke Hoekstra, following approval by the Council of Ministers.

The new legislation provides the Dutch Central Bank (DNB) with tougher supervisory powers and sanctions. The maximum fine that the DNB can impose on a trust office will rise to EUR5m (USD5.9m) from EUR4m, and the bank will have the ability to withdraw operating licenses, among other provisions.

TAGS: individuals | Finance | tax | business | Netherlands | tax avoidance | law | legislation | Invest

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