Feasibility study for a European asset registry in the context of the fight against money laundering and tax evasion :Final report

Table of Contents

• Abstract 5
• Table of Contents 6
• List of figures 13
• List of tables 14
• List of task summaries 16
• List of abbreviations 17
• Glossary 20
• List of country codes 24
• Executive Summary 25
• Inventory of different assets and sources of wealth (Task 1) 25
• Mapping of existing registries (Task 2) 25
• Mapping of potential registries – gap analysis (Task 3) 26
• Operational and IT feasibility assessment (Task 4) 26
• Operational feasibility 26
• IT feasibility assessment of the three scenarios 27
• Cost-benefit analysis 27
• Legal feasibility assessment (Tasks 5 and 6) 28
• EU legal framework and main legal constraints (Task 5) 28
• Legal feasibility of the 3 scenarios (Task 6) 28
• Options for the design and functionalities of an EU asset registry (Task 7) 29
• Note de Synthèse 30
• Inventaire des actifs et des sources de richesse (Tâche 1) 30
• Cartographie des registres (Tâche 2) 30
• Cartographie de potentiels registres – analyse des lacunes (Tâche 3) 31
• Analyse de la faisabilité opérationnel et informatique (Tâche 4) 31
• Faisabilité opérationnelle 32
• Faisabilité informatique des trois Scénarios 32
• Analyse des avantages et des coûts 32
• Évaluation de la faisabilité juridique (Tâches 5 et 6) 33
• Cadre juridique de l’UE et principales contraintes juridiques (Tâche 5) 33
• Faisabilité juridique des trois Scénarios (Tâche 6) 33
• Options pour la conception et les fonctionnalités d'un registre des actifs de l'UE (Tâche 7) 34
• 1. Introduction 35
• Study and background objectives 35
• 2. Research methodology 37
• 2.1 Country coverage 39
• 2.1.1 Quantitative indicators: AML Index, FSI, CPI and KYC 40
• 2.2 Data collection 42
• 2.2.1 Desk research and literature review 42
• 2.2.2 Surveys and interviews 42
• 3. Task 1: Inventory of different assets and sources of wealth 44
• 3.1 Methodology 44
• 3.2 Literature review 45
• 3.2.1 Cash at bank and in hand 46
• 3.2.1.1 Cash in hand 46
• 3.2.1.2 Cash at bank 48
• 3.2.2 Financial assets 49
• 3.2.2.1 Securities 49
• 3.2.2.2 Crowdfunding-platform intermediated assets 51
• 3.2.2.3 Life insurance policies and pension products 53
• 3.2.2.4 Asset insurance policies 54
• 3.2.2.5 Gambling currency 55
• 3.2.2.6 Prepaid cards and vouchers 57
• 3.2.2.7 Limited liability companies 58
• 3.2.3 Intangible assets 59
• 3.2.3.1 Intellectual property rights 59
• 3.2.3.2 Concessions 60
• 3.2.3.3 Crypto assets 61
• 3.2.3.4 In-game assets 62
• 3.2.4 Tangible assets 63
• 3.2.4.1 Real estate 63
• 3.2.4.2 Vehicles 64
• 3.2.4.3 High-value goods 65
• 3.2.4.4 Animal assets 66
• 3.2.5 Commodities 67
• 3.2.5.1 Commodities (precious raw materials) 67
• 3.2.6 Other assets 68
• 3.2.6.1 Safe deposit boxes 68
• 3.2.7 Summary of the literature review 69
• 3.3 Findings from the survey 71
• 3.3.1 Importance of the assets in competent authorities’ investigation and enforcement activities 71
• 3.3.1.1 FIUs 72
• 3.3.1.2 Tax authorities 73
• 3.3.1.3 LEAs 74
• 3.3.1.4 AML supervisors of financial institutions 75
• 3.3.1.5 Summary 76
• 3.3.2 Risk of asset use in money laundering and tax evasion 76
• 3.3.2.1 FIUs 76
• 3.3.2.2 Tax authorities 77
• 3.3.2.3 LEAs 78
• 3.3.2.4 AML supervisors of financial institutions 79
• 3.3.2.4.1 Summary 80
• 3.3.3 Assets to be added or removed from the study 80
• 3.3.3.1 Assets to be added to the relevant list of assets 80
• 3.3.3.2 Assets to be removed from the relevant list of assets 81
• 3.3.4 List of relevant assets 82
• 4. Task 2: Mapping of existing registries and alternative sources of information 83
• 4.1 Methodology 83
• 4.2 Scope, format of the data stored and data protection requirements 90
• 4.2.1 Summary 98
• 4.3 Digitalisation and aggregation level‎ 99
• 4.4 Assessment of the availability and accessibility of national beneficial ownership registries 102
• 4.4.1 Findings based on survey results 103
• 4.5 Accessibility assessment – Type of competent authority 104
• 4.5.1 Survey responses from competent authorities 106
• 4.5.2 Survey responses from registry holders 114
• 4.5.3 Difficulties encountered by competent authorities when accessing asset registries while carrying out their respective tasks (inside the Member State and cross-border) 115
• 4.6 Accessibility assessment – Format of information 117
• 5. Task 3: Mapping of other potential asset registries 119
• 5.1 Methodology 119
• 5.2 Analysis of how best to retrieve financial or non-financial information 119
• 5.3 Gap analysis‎ 120
• 5.3.1 Findings based on survey responses and interviews with registry administering authorities 121
• 5.3.1.1 Romania – Ships 121
• 5.3.1.2 Latvia – Motor vehicles 122
• 5.3.1.3 Germany – Motor vehicles 123
• 5.3.1.4 France – Aircraft 124
• 5.3.1.5 Czechia – Motor vehicles, ships 124
• 5.3.2 Conclusions 125
• 6. Task 4: Operational/IT feasibility assessment and cost-benefit analysis 127
• 6.1 Introduction 127
• 6.2 Operational assessment 128
• 6.2.1 Assessment of challenges that might affect implementation 128
• 6.2.1.1 Data quality 128
• 6.2.1.2 Lack of data harmonisation 129
• 6.2.1.3 Inconsistencies 129
• 6.2.2 Operational feasibility of creating new registries or leveraging existing ones 130
• 6.2.2.1 Operational feasibility of creating new registries 130
• 6.2.2.1.1 Cash in hand 131
• Description of required data for an asset registry 131
• Operational requirements to build an asset registry 131
• Existing data on the asset 131
• Gap between existing state of data and state of data required to build an asset registry 131
• Conclusion 132
• 6.2.2.1.2 Listed securities 132
• Description of required data for an asset registry 132
• Operational requirements to build an asset registry 132
• Existing data on the asset 133
• Gap between existing state of data and state of data required to build an asset registry 134
• Conclusion 134
• 6.2.2.1.3 Unlisted securities 134
• Description of required data for an asset registry 134
• Operational requirements to build an asset registry 134
• Existing data on the asset 135
• Gap between existing state of data and state of data required to build an asset registry 135
• Conclusion 135
• 6.2.2.1.4 Works of art, antiques, collectors’ items and jewellery 135
• Description of required data for an asset registry 135
• Operational requirements to build an asset registry 136
• Existing data on the asset 136
• Gap between existing state of data and state of data required to build an asset registry 136
• Conclusion 137
• 6.2.2.1.5 Commodities (precious raw materials) 137
• Description of required data for an asset registry 137
• Operational requirements to build an asset registry 137
• Existing data on the asset 137
• Gap between existing state of data and state of data required to build an asset registry 138
• Conclusion 138
• 6.2.2.1.6 Safe deposit boxes at non-banks 138
• Description of required data for an asset registry 138
• Operational requirements to build an asset registry 138
• Existing data on the asset 138
• Gap between existing state of data and state of data required to build an asset registry 139
• Conclusion 139
• 6.2.2.1.7 Crypto coins and NFTs 139
• Description of required data for an asset registry 139
• Operational requirements to build an asset registry 139
• Existing data on the asset 139
• Gap between existing state of data and state of data required to build an asset registry 139
• Conclusion 140
• 6.2.2.1.8 In-game assets 140
• Description of required data for an asset registry 140
• Operational requirements to build an asset registry 140
• Existing data on the asset 140
• Gap between existing state of data and state of data required to build an asset registry 141
• Conclusion 141
• 6.2.2.2 Operational feasibility of leveraging existing registries 141
• 6.2.2.2.1 Cash at bank 141
• 6.2.2.2.2 Limited liability companies 141
• 6.2.2.2.3 Properties, Land 141
• 6.2.2.2.4 Motor vehicles 142
• 6.2.2.2.5 Ships 142
• 6.2.2.2.6 Aircraft 142
• 6.2.2.2.7 Firearms 143
• 6.2.2.2.8 Safe deposit boxes at banks 143
• 6.2.2.2.9 Conclusion 143
• 6.3 IT feasibility assessment 143
• 6.3.1 Use of existing interconnection systems as references for implementation 145
• 6.3.2 Existing EU projects as a basis for new development 146
• 6.3.2.1 Technical implementation of services and other technical developments that could serve as components 146
• 6.3.2.2 Network projects 147
• 6.3.3 IT standards and models 147
• 6.3.4 Potential interoperability of existing registries 148
• 6.3.5 Requirements 149
• 6.3.5.1 Architectural requirements 149
• 6.3.5.2 Operational requirements 150
• 6.3.5.3 Techno-functional requirements 151
• 6.3.5.4 Architectural principles 151
• 6.3.6 Elements enabling easy or automatic data searches 152
• 6.3.7 Scope and level of harmonisation required 153
• 6.4 Defining scenarios for an asset registry 155
• 6.4.1 Description, operational feasibility and IT assessment of core scenarios 155
• 6.4.1.1 Scenario 1: Creating new registers/databases at national level in addition to the existing ones (Beneficial ownership, bank account) for sources of wealth for which registers do not exist at national level, and their interconnection at Europea... 155
• 6.4.1.2 Scenario 2: Interconnecting only the existing national registers required under EU law (Beneficial ownership, bank account) and real estate registers with an EU asset registry 158
• 6.4.1.3 Scenario 3: Establishing a central EU asset registry connecting the existing registers at national level and, for sources of wealth not covered by them, featuring a central EU register/database with national access portals. 160
• 6.4.2 Alternative option 163
• 6.4.2.1 Alternative scenario: Interconnection of existing and centralised asset registries (Scenario 2 + Scenario 3) 163
• 6.5 Support functions to serve platform operations 164
• 6.5.1 Standardisation and data modelling 164
• 6.5.2 Governance 165
• 6.6 Assessment of costs and benefits 165
• 6.6.1 Assessment of costs 166
• 6.6.1.1 Scenario 1: Creating new registers/databases at national level in addition to the existing ones (Beneficial ownership, bank account) for sources of wealth for which registers do not exist at national level, and their interconnection at Europea... 166
• 6.6.1.1.1 Cost breakdown of implementation 168
• 6.6.1.1.2 Orders of magnitude: EU-level costs 171
• 6.6.1.1.3 Orders of magnitude: Member State costs 173
• 6.6.1.1.4 IT costs 173
• 6.6.1.1.5 Costs for stakeholders 175
• 6.6.1.2 Scenario 2: Interconnecting only the existing national registries required under EU law (beneficial ownership, bank account) and real estate registers with an EU asset registry 176
• 6.6.1.2.1 Costs at the national level 176
• 6.6.1.2.2 Costs for stakeholders 177
• 6.6.1.2.3 EU-level costs 177
• 6.6.1.3 Scenario 3: Establishing a central EU asset registry connecting the existing registers at national level and, for sources of wealth not covered by them, featuring a central EU register/database with national access portals. 178
• 6.6.1.3.1 Member State costs 180
• 6.6.1.3.2 Stakeholder costs 180
• 6.6.2 Comparative overview of costs 181
• 6.6.3 Assessment of benefits 182
• 6.6.4 Ratings-based assessment of benefits 186
• 7. Task 5: Legal feasibility assessment: EU law framework and legal constraints 192
• 7.1 EU Legal framework 192
• 7.1.1 State of play: information exchange mechanisms under the AMLD framework 192
• Information exchange: obliged entities’ obligation to collect and report information 192
• Cooperation and exchange of information between FIU’s and competent authorities 193
• BORIS 196
• Bank account registers (BAR) 197
• Real estate ownership 198
• 7.1.2 State of play: information exchange under the framework for combatting tax evasion 199
• Value Added Tax (VAT) 199
• Tax Recovery 200
• Direct Taxation 200
• 7.1.2.1 Scope and subject matter of DAC 201
• 7.1.2.2 Types of exchanges of information under the DAC Directives 201
• 7.2 Assessment of the legal constraints 204
• Charter of Fundamental Rights (CFR) 205
• General Data Protection Regulation (GDPR) 205
• Data subjects’ rights and possible restrictions 207
• Interplay between the GDPR and the DAC 208
• Interplay between the GDPR and the AMLD 208
• General Principles of EU law 208
• Subsidiarity assessment for the creation of a single point of access to information 209
• Proportionality assessment 209
• Conclusion 210
• 8. Task 6: Legal feasibility assessment – Analysis of the 3 scenarios 210
• The objective of creating a single access point of information 211
• Legal basis under EU law 212
• 8.1 Scenario 1: The legal feasibility of creating new registers/databases at national level in addition to the existing ones (Beneficial ownership, bank account) for sources of wealth for which registers do not exist at national level, and their inter... 212
• 8.1.1 Description of Scenario 1 213
• 8.1.2 General considerations 214
• Fundamental Rights considerations ( ) 214
• Data controllership 215
• 8.1.3 Legal feasibility for creating new asset registries for assets in Scenario 1 216
• 8.1.3.1 Cash in hand 216
• General proportionality test of creating asset registries for cash in hand 216
• Appropriateness and suitability of creating asset registries for cash in hand 216
• 8.1.3.2 Listed securities 218
• Proportionality (stricto sensu) of creating asset registries for listed securities 221
• 8.1.3.3 Unlisted securities 222
• 8.1.3.4 High value goods (Works of Art, Antiques, Collectors’ items, Jewellery) and firearms 224
• 8.1.3.5 Commodities (precious raw materials) 226
• 8.1.3.6 Safe-deposit boxes at non-banks 229
• 8.1.3.7 Crypto Coins and NFTs 231
• Proportionality (stricto sensu) of creating asset registries for Crypto coins and NFTs 234
• Conclusion 234
• 8.1.3.8 In-game assets 235
• 8.1.4 Leveraging existing national registries for assets in Scenario 1 236
• 8.1.4.1 Motor-vehicles, ships and aircraft 236
• 8.1.4.2 Cash at bank/Safe deposit boxes at banks 239
• 8.1.4.3 Limited Liability company 239
• 8.1.4.4 Real Estate 240
• 8.1.5 Conclusion – Scenario 1 240
• 8.2 Scenario 2: The legal feasibility for interconnecting only the existing national registers required under EU law (Beneficial ownership, bank account) and real estate registers with an EU asset registry 241
• 8.2.1 Description of Scenario 2 241
• 8.2.2 General considerations 242
• Data controllership 242
• Central registries and harmonisation of the data 243
• Overall conclusions on the general considerations 243
• 8.2.3 Assets considered under Scenario 2 244
• 8.2.3.1 Beneficial Ownership registries (‘BORIS’) 244
• 8.2.3.2 Cash at bank/Safe deposit boxes at banks 244
• Current legal framework 244
• EU obligation to have in place a centralised bank account registry and scope of the information contained therein 244
• Access of FIUs and competent authorities to the databases 245
• 8.2.3.3 Real estate registries 247
• Current legal framework 247
• General AMLD and DAC obligations 247
• Necessity and proportionality of interconnecting real estate registers 250
• Necessity of interconnecting real estate registers and mitigating measures in place 251
• 8.2.4 Conclusion – Scenario 2 251
• 8.3 Scenario 3: The legal feasibility of establishing a central EU asset registry connecting the existing registers at national level and, for sources of wealth not covered by them, featuring a central EU register/database with national access portals 251
• 8.3.1 Description of Scenario 3 252
• Scope of the information and interference with fundamental rights 252
• 8.3.2 Conclusion – Scenario 3 255
• 8.4 Alternative scenario: The legal feasibility of interconnecting existing and centralised asset registries 256
• 8.4.1 Description of alternative scenario 256
• 8.4.2 Conclusion – alternative scenario 257
• 9. Task 7: Technical study – Options for the design and functionalities of an EU asset registry 258
• 9.1 Methodology 260
• 9.2 Description of the main parameters of the IT infrastructure 260
• 9.2.1 Technical considerations 260
• 9.2.2 Security 261
• 9.2.2.1 Heterogeneity of the data 262
• 9.2.2.2 Common identifiers and methods of correlation between records 263
• 9.2.2.3 Governance: Access to data and responsibilities for maintenance 264
• 9.2.3 External architectural references 265
• 9.2.4 Main parameters 265
• 9.2.5 Key architectural principles 266
• 9.3 Description of the technical architecture 267
• 9.4 Description of the interface 268
• 9.5 Description of search possibilities 269
• 9.6 Calculation of costs of establishment and maintenance 270
• 9.6.1 General assumptions 272
• 9.6.2 Volumetric information 272
• 9.6.2.1 Inquiries 273
• 9.6.2.2 Storage space and records 273
• 9.7 Defining the implementation strategy 273
• 9.7.1 Issues and possible solutions that have to be considered in the implementation strategy 274
• 9.7.2 Analysis of the implementation strategy 274
• 9.7.2.1 A 5-year implementation strategy 275
• 9.7.2.2 A 3-year implementation strategy 275
• Conclusions 278
• References 280
• Publications 280
• Legislation and other sources 287
• ANNEX A: RESEARCH METHODOLOGY 292
• ANNEX B: DEFINITIONS OF IDENTIFIED ASSETS AND SOURCES OF WEALTH 307
• ANNEX C: ASSETS TO BE REMOVED FROM THE LIST BASED ON SURVEY RESPONSES (SHARE OF COMPETENT AUTHORITIES by AUTHORITY CATEGORY) 315
• ANNEX D: LIST OF ASSOCIATIONS INTERVIEWED 316
• ANNEX E: LIST OF AUTHORITIES INTERVIEWED 316
• ANNEX F: CASE STUDIES FOR IT FEASIBILITY 317
• ANNEX G: CASE STUDIES ON ASSET CATEGORY NETWORKS 328