Public register of trusts, established in December 2013 by a law on action against tax fraud and serious economic and financial crime, has been accessible to everyone online as of June 30, 2016.
This register contained the identification of the trust reported in the French filing obligations, the identification of the trustees, the settlor and the beneficiaries as well as the date of setting up of the trust.
By a decision dated October 21, 2016, the French Conseil constitutionnel ruled that the Public register of trusts is unconstitutional for breach of privacy rights.
This decision is the consequence of a judgment plea filed by a tax resident of France who had settled a trust in the US. Her grievance was that the register had revealed her testamentary intentions, exposing her to family pressure.
By way of a priority preliminary ruling on constitutionality (French Question Prioritaire de Constitutionnalité, QPC), the French Conseil d’Etat has decided to refer the question of the compliance of this public register with the right to respect for private life to the French Conseil constitutionnel.
As a result of this decision, public consultation of the trust register is no longer possible.
Decision n° 2016-591 QPC of the French Conseil Constitutionnel dated 21 October 2016
The French Conseil constitutionnel ruled that the mention, on a public register, of the name of the settlor, the beneficiaries and the trustee of a trust, provides information to the public on the way a person disposes of his assets and therefore constitutes a breach of his privacy rights.
In addition, the French Conseil constitutionnel has considered that the release of the French public register of trust was a disproportionate measure due to the absence of any limitation regarding the people and the reasons allowing access to the public register.
As a consequence, the French Conseil constitutionnel declared the public register of trusts unconstitutional.
Conclusion
It is possible that the French legislator is not giving up the concept of such public register, and bring the register into compliance with the Constitution. We shall of course keep you updated of any change that could be decided.
We draw your attention to the fact that the removal of public access to the trust register does not justify any exemption from reporting the existence of the trust or the annual trust filing. Failure to report a trust is punishable by a fine of up to 12.5% of the trust assets.
