Trust Foundations & Private Client

Trust Foundations & Private Client

5MLD | Jersey Trusts | Parslows International

5MLD – Will centralised company and trust registers arrive in the Crown Dependencies ahead of the Overseas Territories?

4MLD has since morphed into 5MLD, with the scope of access to company beneficial ownership registers entirely recast.  Unequivocally, there will now be full public access.  Whereas 4MLD anticipated that only trusts which “generate tax consequences” would need to be registered, 5MLD removes that limitation.  5MLD has not gone so far as to require public access to trust registers, but it does require public access if a trust holds a controlling interest in a company that is not EU incorporated.  That potentially undermines the concession.

5MLD - Beneficial ownership register | Parslows International

Introduction of centralised company and trust beneficial ownership registers

In a previous article, we analysed the EU’s drive over the last few years to introduce centralised company and trust beneficial ownership registers.

We identified that the relevant EU legislation (the 4th Anti- Money Laundering Directive – “4MLD”), in its guise at the time, would require those registers to be accessible to competent authorities, law enforcement and “obliged entities” (e.g. banks for CDD purposes), as well as persons able to demonstrate “a legitimate interest” – the latter a genus which had yet to be defined.

Our article observed that the nature and scope of the central registers contemplated by 4MLD may well evolve, and that, while Jersey’s Chief Minister’s Department had pointed out that Jersey was not bound to adopt 4MLD, it was likely that the EU and the UK would place pressure on Jersey to conform. Those observations have proved somewhat prophetic.

4MLD has since morphed into 5MLD

4MLD has since morphed into 5MLD, with the scope of access to company beneficial ownership registers entirely recast. Unequivocally, there will now be full public access. Whereas 4MLD anticipated that only trusts which “generate tax consequences” would need to be registered, 5MLD removes that limitation. 5MLD has not gone so far as to require public access to trust registers, but it does require public access if a trust holds a controlling interest in a company that is not EU incorporated. That potentially undermines the concession (granted at the UK government’s request) that access to trust registers only be granted to those with a “legitimate interest”. 5MLD also introduces the EU’s vision for a European Centralised Platform – a network of interconnected company and trust registers across all member states.

The UK government has exerted significant pressure on Britain’s Crown Dependencies (Jersey, Guernsey and the Isle of Man) and its Overseas Territories to fall into line with publicly accessible company beneficial ownership registers.

That came to a head in May 2018 with the UK’s Sanctions and anti-Money Laundering Act, which requires the UK Secretary of State to order the Overseas Territories to implement such registers, if they have not complied voluntarily by 31 December 2020. It has been the cause of consternation among some of the Overseas Territories, with assertions that the UK has overstepped its power and even calls for a break from the long-standing constitutional ties with the UK.

Similar provisions affecting the Crown Dependencies were removed from this UK legislation at the eleventh hour (constitutional limitations on the power of the UK government to legislate for the Crown Dependencies likely playing a part in that).

Implementation

Despite the Crown Dependencies ultimately not having being included in the UK Act, it is interesting to note that, while the Overseas Territories have been given a fixed deadline date of 31 December 2020 to implement publicly accessible company registers, the equivalent provisions relating to the Crown Dependencies (had they been adopted) would instead have utilised “the deadline set for implementation of the European Union’s 5th Anti- Money Laundering Directive”.

5MLD was approved by the EU’s Council of Ministers on 14 May 2018. With those revisions, the 2017 deadline for member states to establish centralised company registers has been pushed back to late 2019, and early 2020 for trust registers.

The UK may not have legislated for the Crown Dependencies, but (as the above wording ultimately omitted from the Sanctions and anti-Money Laundering Act suggests), the UK government likely expects that, true to previous form, the Crown Dependencies will voluntarily adopt EU AML legislation in line with timeframes laid down for member states.

If that does occur, and for both company and trust registers the Overseas Territories instead work to the 31 December 2020 deadline imposed upon them, the Crown Dependencies’ company and trust registers would be in place more or less 12 months ahead of those of the Overseas Territories.

Brexit

Brexit will have occurred by the time these 5MLD deadlines have arrived, and it is difficult to predict how that might affect the UK’s place within the EU vision of a seamless centralised pan-European trust and company register. However, as the UK has been a key proponent of the transparency agenda, it seems unlikely that this will bring a significant policy change on the part of the UK government in terms of its expectations of the Crown Dependencies and Overseas Territories.

Seeking further advice?

If you require further information or advice please contact our head of department,  Mason Birbeck on +44 (0)1534 630530 or email mason.birbeck@parslowsinternational.com


Main Contact | Mason Birbeck

Head | Trusts, Foundations & Private Wealth


Please note that the information provided on this website is for general information purposes only and is designed to provide you with an outline of the legal services or opinions we offer.  Whilst we endeavour to ensure our information is correct and useful, we make no representations or warranties regarding the accuracy or completeness of the information offered.  Information on our website does not constitute legal advice and Parslows International accepts no liability for any loss or damage arising out of, or in connection with, the information found in this website.  Please consult a lawyer in the event that you require professional assurance that our information, and your interpretation of the same, is correct.

UK forces public ownership registers on certain offshore jurisdictions – but not Jersey | Parslows International

Trust Foundations & Private Client

Jersey Foundation Guide | Jersey Foundations | Parslows International

Jersey Foundation

Because a Jersey foundation can be formed with or without beneficiaries; have a constitution similar in form to either company articles or a trust deed; can vest the founder or guardian with extensive positive or veto powers; and promote a purpose or benefit individuals (or both), it offers a good deal of flexibility, for a variety of functions.

Jersey Foundation Parslows International

Origins of Foundations

The concept of a Jersey Foundation is derived from a civil law concept, adopted in countries whose laws developed from France’s Napoleonic Code (most of Europe, South America and parts of Asia). Originally established for public interest purposes (e.g. as charitable bodies), the private foundation is a more modern initiative adopted in various civil law jurisdictions for succession planning and asset protection purposes.

Common law jurisdictions, with laws based on the English law model (USA, Commonwealth countries), instead adopted the concept of trusts with separate legal and equitable interests in property.

Though Jersey is principally a common law jurisdiction, in July 2009 it adopted legislation, the Foundations (Jersey) Law 2009 (the Jersey Foundations Law), introducing the Jersey law governed foundation. It was perceived that this would add flexibility to Jersey’s financial services offering, being particularly attractive to those based in civil law jurisdictions.

Characteristics / features of a Jersey foundation

A Jersey foundation could be described as a hybrid between a trust and a company, though the flexibility of the Jersey Foundations Law enables the establishment of a foundation having features either more characteristic of a trust than a company, or vice versa.

A foundation shares similarities with a company, in that it is an incorporated body with separate legal personality which can transact in its own name. However, unlike a company, a Jersey foundation is an orphan vehicle – it has no owners (no shareholders).

A foundation shares similarities with a Jersey trust because it is established with beneficiaries or for a specific purpose. The foundation’s guardian serves a somewhat similar oversight function to a trust’s protector (or a Jersey purpose trust’s enforcer), and the role of founder is analogous to a trust’s settlor – the founder being the originator of the foundation.

The management functions of  a Jersey foundation is performed by its council. The foundation council must have a qualified member – a person licenced by Jersey’s financial services regulatory authority.

Jersey foundation – Creation / incorporation

Being an incorporated body, the formation process of a Jersey Foundation is similar to that of a Jersey company. It requires an application to Jersey’s Registrar of Companies for incorporation / registration. The foundation is formed on registration by the Registrar. Applying to form a foundation is a regulated activity, requiring a person holding a Jersey trust company business licence to act as formation agent.

The Foundation’s constitution

The Charter

The charter identifies the foundation’s objects, which can be to benefit a person or a class of persons, and / or to carry out a specific purpose or purposes. It may be charitable or non-charitable, or a combination of both.

The charter identifies the name of the foundation and any initial endowment. The charter must record what is to happen with the foundation’s assets on dissolution, however, if that is sensitive information, it can be dealt with by cross–reference to the regulations. If the foundation is to be of limited duration, then the dissolution date needs to be specified. It is possible to limit disclosure of information in the charter, so that anything of a confidential nature is instead included in the regulations.

The Regulations

Jersey’s foundation legislation requires that the regulations (or alternatively the charter):

• establish a council;
• identify how decisions of the council are to be made, and if they need approval of another person for certain decisions, set out whose approval is needed and when;
• set out the functions of the council and whether it can delegate its powers;
• provide for the appointment, retirement and remuneration (if any) of the council members, and the mechanism for appointment of a new qualified member if there ceases to be one;
• identify the initial guardian, how a guardian may be appointed / retire, and any entitlement to remuneration the guardian will have.

The Founder

The Founder is the person who gives instructions to apply for the foundation’s incorporation. A founder has such rights in respect of the foundation and its assets as are conferred on him / her by the charter and the regulations. The regulations could, for example, reserve certain powers of the founder in relation to the foundation’s assets, empower the founder to give prescribed directions to the council in relation to certain matters, or require input from the founder before the council can exercise powers in relation to certain specified assets.

The founder can assign his / her rights to another person if the charter or regulations permit that. Otherwise, on the founder’s death his / her rights will automatically pass to the guardian, unless the regulations make other provision.

The Council

The council’s role is to manage the foundation, administer its assets and carry out its objects. It can have one or more members (being individuals or corporate entities), but must have a qualified member. Council members must act in accordance with the charter and regulations, act honestly and in good faith with a view to the best interests of the foundation, and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

Nothing in the terms of the charter or regulations can relieve a council member from liability for fraud, wilful misconduct or gross negligence. Like company directors, council members can be subject to disqualification orders preventing them from acting as a council member, or a company director.

The Guardian

A foundation must have a guardian, which can be an individual or a corporate body. A council member cannot also be the guardian unless that council member is the foundation’s founder or its qualified member. The guardian’s role is to ensure that the council carries out its functions, the council being accountable to the guardian for its administration of the foundation and the furtherance of its objects.

The regulations can confer on the guardian power to approve / disapprove of any specified actions of the council (similar to the type of veto powers that a protector of a trust might have). In addition, unless the regulations prohibit it, the guardian can sanction actions of the council that would otherwise not be permitted by the charter or regulations – provided the guardian is satisfied that the council is acting in good faith, and that what is proposed is in the interests of the foundation.

The Foundation’s objects

A foundation need not have beneficiaries. It can exist solely for a given purpose. If a foundation does have beneficiaries, their position vis-à-vis the foundation is quite different as compared with beneficiaries of a trust. A foundation’s beneficiary has no interest in the foundation’s assets, and is not owed any fiduciary or analogous duty by the foundation, its council or anyone else vested with a function under the regulations.

Accordingly, the beneficiaries of a foundation do not, for example, have collective power to vary or terminate the foundation in the same way that beneficiaries of a trust have under trusts law.
In contrast to trust beneficiaries, a foundation is not required to provide a beneficiary with any information about the foundation, (such as its administration, assets or how its objects are being carried out), unless the charter or regulations provide otherwise.

The Foundations Law does however include protections for a foundation’s beneficiaries. If a beneficiary does become entitled to benefit by virtue of something written into the regulations or by having benefit conferred on him / her by the council, and that benefit is not satisfied, then the beneficiary can apply to Jersey’s Royal Court to enforce that entitlement.

Powers of the Court

Jersey’s Royal Court has broad supervisory jurisdiction in relation to Jersey foundations. The Foundations Law sets out various actions that the Court can take following a request by a person who, under the legislation, has “standing” (such as the foundation itself, the founder, council members, the guardian and beneficiaries) to make a court application in relation to the foundation.

Among its powers, the Court can order a person (including the foundation itself) to comply with requirements / obligations set out in the Foundations Law or the foundation’s constitution, amend the charter and regulations (if that will assist with administration of the foundation’s assets or further its objects), and dismiss or appoint a member of the council.

Article 32 of the Foundations Law contains provisions to the effect that any questions arising in relation to the foundation or an endowment of a foundation is to be determined by reference to Jersey law without reference to the laws of any other jurisdiction. That includes rules of foreign law affecting founders and beneficiaries. This addresses concerns that foreign forced heirship rules might be used to attack the validity of a founder’s transfer of assets to the foundation by way of endowment or a claim (say by a beneficiary) of entitlement to the foundation’s assets.

Uses for foundations

A foundation is a popular entity for use in estate planning and wealth structuring, especially for persons based in civil law jurisdictions which do not recognise, or may be unfamiliar with, the concept of a trust. Being an orphan vehicle it is suitable for holding the shares in a private trust company (PTC) or acting as the PTC itself.

A foundation can be ideal for charitable or philanthropic uses. It can have unlimited duration. Its objects can be purely charitable, or can mix charitable purposes with purposes which are not “technically” charitable in that they are not regarded as charitable as a matter of law. It can provide benefit for purposes and to specific people or classes of people (as beneficiaries). The philanthropic founder can take a direct active role in the management and application of the foundation’s assets by assuming the office of guardian or council member. It is therefore common to see foundations used for a range of philanthropic causes such as promoting art, theatre, education and scientific research.

A Jersey foundation can be formed for the sole object of holding a specific asset. The Foundations Law does not impose an inherent duty on a foundation’s council to preserve, enhance or diversify the foundation assets. The same cannot be said for trustees of a trust, who do have such duties unless they are expressly excluded by the trust terms. Accordingly, a foundation is well suited to holding wasting assets such as a yacht or aeroplane.

A foundation can also serve as a robust retaining vehicle for a family business where competing family interests may arise – some in favour of selling the business, others in preserving it. The council’s duty is to the foundation, not its beneficiaries, and it is accountable to the foundation, not its beneficiaries (in contrast with a trustee, whose duties and accountability are to the trust’s beneficiaries and whose actions may therefore be more susceptible to challenge by the beneficiaries). A foundation is not obliged to provide information to beneficiaries. In contrast, a trust beneficiary has a prima facie right to certain trust information. Accordingly, in comparison to a trustee, a foundation’s council may be better able to resist requests for information from beneficiaries seeking grounds on which to challenge council decisions, or to establish an entitlement to benefit.

For structured finance transactions, a foundation meets the need for the SPV to be a legal entity in its own right. As it has no owner, is satisfies the requirement for it to be an orphan vehicle which does not share common ownership with other entities in the structure. The object of the foundation can be a single limited and specific purpose – such as to hold shares in a particular company.

Seeking further advice?

If you require further information or advice on setting up a Jersey Foundation please contact our head of department,  Mason Birbeck on +44 (0)1534 630530 or email mason.birbeck@parslowsinternational.com


Main Contact | Mason Birbeck

Head | Trusts, Foundations & Private Wealth

Jersey Foundations | A brief introduction


Please note that the information provided on this website is for general information purposes only and is designed to provide you with an outline of the legal services we offer.  Whilst we endeavour to ensure our information is correct and useful, we make no representations or warranties regarding the accuracy or completeness of the information offered.  Information on our website does not constitute legal advice and Parslows International accepts no liability for any loss or damage arising out of, or in connection with, the information found in this website.  Please consult a lawyer in the event that you require professional assurance that our information, and your interpretation of the same, is correct.
Trust Foundations & Private Client

Trustee protection – limitation of liability | Jersey Trusts | Parslows International

Trustee protection Parslows International

Privy Council recognises Jersey trustee protection “free-standing” from contractual claims

The recent Privy Council trust judgment in Investec Trust (Guernsey) Ltd & ors v Glenalla Properties Ltd [2018] UKPC 7 concerned trustee protection proceedings issued in the Guernsey courts in relation to contractual claims by the liquidators of BVI creditors against the former, Guernsey based, trustees of the Jersey proper law Tchenguiz Discretionary Trust.

The creditors claimed against the former trustees which, in turn, sought an indemnity from the trust assets, itself resisted by the current trustees.

Key issue was whether or not former trustee personal assets had trustee protection

A key issue in this case was whether or not the former trustees’ own personal assets were protected from the creditors’ claims, so that the creditors’ recourse was only to the trust assets.

That required analysis of the effect of Article 32(1) of the Trusts (Jersey) Law 1984, which provides that, where a trustee is a party to a transaction or matter affecting the trust, and the other party knows that the trustee is acting as trustee, that party’s claims are restricted to the trust property.

The Board identified the distinction between English and Jersey trusts law created by Article 32(1).  It held that the Jersey legislation abrogated the rule of English law to the effect that the law looks no further than the legal entity which has assumed the liability.

In contrast, the Board held that Jersey law introduced a legal distinction between a trustee’s two capacities – personal and fiduciary, recognising the ability for a trustee to incur liabilities “as trustee” thereby denying third parties recourse to the trustee’s personal estate.

However, the creation of a direct right of action against the trust assets was not to be regarded as a corollary of that.  Instead, Jersey law did still subscribe to the rule of English law to the effect that a creditor may access trust assets only by way of the trustee’s right of indemnity.

Accordingly, a creditor would have no right to the trust fund, other than through its right of subrogation to any entitlement which the trustee might have under its indemnity from the trust fund.

It was the BVI creditors’ reliance on subrogation which the current trustees of the Tchenguiz Discretionary Trust sought to utilise as a means by which to prevent them having recourse to the trust funds.

The current trustees argued that the former trustees (and so in turn the subrogated creditors) were not entitled to rely on that indemnity because, while the liabilities to the creditors might have been reasonably incurred at the outset, the subsequent failure by the former trustees to seek to discharge them had been unreasonable.

This required analysis of a further provision of Jersey’s trust legislation – Article 26(2), which gives a trustee a right of reimbursement of all expenses and liabilities reasonably incurred in connection with the trust.  The Board did not accept the current trustees’ argument.  It concluded that availability of the statutory indemnity falls to be assessed when the liability for which the indemnity is sought is first incurred, not with hindsight having regard to subsequent events.  The current trustees’ assertion of unreasonable failure to discharge the liabilities should instead be pursued against the former trustees by way of an action for breach of trust.

The Board, however, determined that Article 32(1) did not have the effect of limiting the liability of a trustee in relation to the costs of legal proceedings, being liabilities personal to the trustee.  Further, that having the blessing of a Beddoes order would not protect a trustee from an award of costs against it personally, if its behaviour in the conduct of the litigation was unreasonable.

The Board’s conclusions as to the effect of these Jersey statutory provisions were not the end of the matter.  What relevance these Jersey law provisions should have, in Guernsey proceedings against Guernsey trustees in relation to BVI law governed contracts, was also a point in issue.  A matter determined by Guernsey private international law.

The creditors argued in favour of the “discharge rule”: that the extent of, (and limitation of), the former trustees’ liabilities should be decided by reference to the contractual liabilities, and that the law which governs the discharge of a contractual liability should be the same as the law of the underlying contract.

The Board however favoured the “status rule”: that questions as to the capacity in which trustees act, and the liability consequences which flow from that capacity, should be governed by the proper law of the trust of which they are trustees.

In relation to that, the Board recognised that the English courts had grappled with the conceptual problem of a foreign representative entity capable of suing or being sued in England, but which under foreign law created liability for its members only in a particular capacity.

In relation to that, the Board commented:

the time has come to recognise that as a general rule the common law will recognise and give effect to limitations of liability which arise under an entity’s constitutive law by reason of the particular status or capacity in which its members or officers assume an obligation.”.

The Board went on to confirm that it would not confine this rule to entities which have separate legal personality but would apply it to partnerships and associations of persons without legal personality and also a Jersey or Guernsey trust.

It is interesting to note that the Board’s decision was not unanimous, with Lord Mance and Lord Briggs dissenting on differing aspects of the majority’s conclusions.

Significant development | Trustee protection

The Privy Council’s recognition of two separate (personal and fiduciary) capacities of trustees of a Jersey trust has been perceived as a significant development.  Parties contracting with trustees of a Jersey proper law trust should be live to this recognition of a potential “free-standing” protection from contractual liabilities afforded to trustees, regardless of the contract’s governing law or the forum in which contractual obligations may be litigated.

If you require further information or trust advice please contact Mason Birbeck mason.birbeck@parslowsinternational.com

 

Trusts, Foundations & Private Wealth

Main contact: Mason Birbeck

Trusts, Foundations & Private Wealth

Mason Birbeck is an expert in Trust Law.  If you require any clarification on this briefing please contact him.

Trust Foundations & Private Client

Amendments to Jersey’s Trust Legislation – Article | Jersey Trusts | Parslows International

Article – Further Amendments to Jersey’s Trust Legislation – Trusts Amendment 7

 

The Trusts (Amendment No.7) (Jersey) Law 201- (“Trusts Amendment 7”) is expected to come into force later in 2018.  It will clarify rather than substantially revise the Trusts (Jersey) Law 1984 (“Trusts Law”).

The principal changes:

Article 1 – new definition of “officer”

In recognition that modern trusts operate in conjunction, not just with corporations, but also other vehicles (LPs, LLPs SLPs etc.), this new definition confirms that relevant provisions of the Trusts Law apply to that wider scope of legal entities, and natural persons connected with them.

Art 9A – settlor reserved / granted powers and interests

Article 9A sets out the nature of powers that can be reserved / granted by a settlor.

Trusts Amendment 7 will clarify, among other things, that:

  • not just some only, but all, of those listed powers can be reserved or granted;
  • the ability to reserve / grant powers in relation to underlying entities in which the trust holds an interest extends not only to underlying corporations, but also other entities – e.g. LPs, LLPs SLPs etc.;
  • the reservation or grant of a power does not of itself constitute the power holder a trustee.

Article 29 – disclosure of information

Article 29 deals with disclosure of trust information and documentation.

Trusts Amendment 7 introduces a new Article 29 which confirms that a trust’s terms can restrict beneficiaries’ access to documents which relate to or form part of the trust accounts.

In recognition of the need to protect both principles of confidentiality and of accountability to beneficiaries, (and potentially competing interests of different beneficiaries, trustees and others), this new Article 29 introduces provisions aimed at balancing a beneficiary’s right to request disclosure, against a trustee’s right to refuse it.

It recognises the court ‘s power to make discretionary orders relating to requests for trust information or documentation.

Article 38 – accumulation and advancement

Article 38 sets out rules for how trustees deal with accumulation and application of trust income.

Trusts Amendment 7, clarifies and widens the options for trustees regarding the accumulation and distribution of income, and the characterisation of trust receipts as either capital or income.

The default requirement to distribute income not accumulated is replaced.  Instead, income is to be retained as income for so long as and to the extent that:

  • income is not distributed / required to be distributed by the trust terms;
  • no trust to accumulate income and add it to capital, or retain it as income, applies or is exercised.

It confirms that there is no time limit within which powers to accumulate income / add it to capital, or to distribute it or retain it as income, must be exercised.

New Article 43A – Security

This new Article 43A clarifies the legislative entitlement to “reasonable security” in the context of ceasing to be a trustee, distributing trust property, or a trust’s termination or revocation.

For Jersey trusts, a contractual indemnity from the recipient of trust funds in favour of the trustee has become the market standard mechanism by which to deal with trustees’ potential personal exposure to trust liabilities.

Article 43A acknowledges that, clarifies which persons (e.g. trustees and their officers) may rely on such an indemnity, and confirms that the doctrine of privity of contract will not operate to prevent those not party to such a contractual indemnity being able to enforce it.

Article 47(1)

Article 47 empowers the court to approve variations to a trust, or enlarge the trustees’ management and administrative powers, but only on behalf of persons who cannot do so themselves (e.g. minors or unascertained beneficiaries).

Trusts Amendment 7 extends the court’s powers, enabling it to give approval on behalf of persons who cannot be found despite reasonable efforts, and on behalf of a member of a beneficial class the size of which makes it unreasonable to contact that member.

Extending the court’s powers will enable advantageous changes to trust arrangements which might otherwise be frustrated or delayed because beneficiaries cannot be located, or the class of beneficiaries is particularly wide.

 

Conclusion

The changes which Trusts Amendment 7 will bring are evolutionary rather than revolutionary.  They add clarity and further flexibility to Jersey’s trusts legislation, ensuring that it remains a jurisdiction at the forefront of international wealth planning.

 

Amendments to Jersey’s Trust Legislation – Briefing | Jersey Trusts | Parslows International

Trusts, Foundations & Private Wealth

Main contact: Mason Birbeck

Trusts, Foundations & Private Wealth

Mason Birbeck is an expert in Trust Law.  If you require any clarification on this briefing please contact him.

Trust Foundations & Private Client

Amendments to Jersey’s Trust Legislation – Briefing | Jersey Trusts | Parslows International

Briefing – Further Amendments to Jersey’s Trust Legislation – Trusts Amendment 7

Jersey’s government has approved further amendments to its principal trusts legislation – the Trusts (Jersey) Law 1984 (“Trusts Law”).  Those changes, to be implemented by the Trusts (Amendment No.7) (Jersey) Law 201- (“Trusts Amendment 7”), will clarify rather than substantially revise the Trusts Law, and are expected to come into force later in 2018.

The legislative changes:

Article 1 – new definition of “officer”

A new definition of “officer” is inserted which includes:

  • A foundation council member;
  • a director, manager, secretary or other similar officers of a corporation;
  • a partner of a limited liability partnership;
  • a general partner or limited partner participating in the management of an incorporated limited partnership or separate limited partnership
  • any other person purporting to act in any of the above capacities.

Why the change?

In recognition that modern trusts operate in conjunction not just with corporations but also with other vehicles (e.g. LPs, LLPs SLPs etc.), this new definition confirms the application of relevant provisions of the Trusts Law to that wider scope of legal and natural persons.


Article 9 – Extent of application of law of Jersey to creation, etc. of a trust

A minor change to Article 9(2A) is made in recognition that, in so far as that provision deals with determining the capacity of legal persons, that includes not just corporations but also other legal persons (such as LLPs and SLPs).


Art 9A – settlor reserved / granted powers and interests

Article 9A sets out the nature of powers that can be reserved / granted by a settlor.

Trusts Amendment 7 will clarify, among other things, that:

  • not just some only, but all, of those listed powers can be reserved or granted;
  • the ability to reserve / grant powers in relation to underlying entities in which the trust holds an interest extends not only to underlying corporations, but also other entities – e.g. LPs, LLPs SLPs etc.;
  • the reservation or grant of a power does not of itself constitute the power holder a trustee.


Article 29 – disclosure of information

Article 29 deals with rights to, and duties of, disclosure of information and documentation concerning a trust.

Trusts Amendment 7 replaces the pre-existing Article 29 entirely.  The new Article 29 recognises that a trust’s terms may:

  • confer a right to request disclosure of information;
  • determine the extent of the right to information; and
  • impose a duty upon a trustee to disclose information to any person.

It also gives beneficiaries the right, (subject to the trust terms or court order), to request disclosure of documents which relate to or form part of the accounts of the trust.

However, as a protection, Article 29 also empowers trustees (subject to court order) to refuse a disclosure request if satisfied that to do so is in a beneficiary’s interests.

What is preserved from the pre-existing Article 29 is a trustee’s right, (subject to the trust terms or court order), to refuse disclosure of information or documents which identify the trustee’s deliberations or the reasons for its decisions.

Article 29 also recognises the power of the court to make discretionary orders relating to a request for / receipt of information or documentation concerning a trust.  A trustee, beneficiary or enforcer (or such others person as the court permits) can apply for such an order.

Why the change?

Amending Article 29 removes uncertainty as to whether the express terms of a trust can restrict beneficiaries’ access to documents which relate to or form part of the trust accounts.

It also updates the legislation so as to reflect developments in Jersey case law in more recent years which have recognised the need to balance principles of confidentiality and of accountability to beneficiaries, and in that regard potentially competing interests of different beneficiaries, the trustees and other persons.


Article 38 – accumulation and advancement

Article 38 sets out rules for how trustees deal with the accumulation and application of trust income.  Currently, save for income attributable to a minor’s interest, the default position (unless supplanted by a trust’s express terms) is that income not accumulated must be distributed.

With Trusts Amendment 7, that default requirement to distribute income not accumulated is replaced.  Instead, income is to be retained as income for so long as and to the extent that:

  • income is not distributed / required to be distributed by the trust terms;
  • no trust to accumulate income and add it to capital, or retain it as income, applies or is exercised.

A new Article 38(2A) clarifies that, unless the trust terms provide otherwise, there will be no time limit within which the power to accumulate income / add it to capital, or to distribute it or retain it as income, must be exercised.

Why the change?

The amendments clarify and widen the options for trustees in relation to the accumulation and distribution of income, and the characterisation of trust receipts as either capital or income.


Article 43 – Termination of a Jersey Trust

Article 43 addresses how trust property is to be dealt with when a trust terminates.  One element of that is the right of trustees to be provided with reasonable security against trust liabilities.

A similar entitlement to reasonable security is contained in Article 34 of the Trusts Law, in the context of a trustee ceasing to be trustee (e.g. on resigning from office).

Trusts Amendment 7 introduces a new Article 43A which clarifies that entitlement to reasonable security in the context of ceasing to be a trustee, distributing trust property, or a trust’s termination or revocation.

Article 43A specifically addresses “reasonable security” provided in the form of a contractual indemnity, and sets out the categories of persons in whose favour such an indemnity may be provided (including, for example, a corporate trustee’s officers and employees).  It confirms that such persons may enforce such an indemnity made in their favour whether they are party to it or not, including a contractual indemnity made by other persons (e.g. replacement trustees) after their relationship with the trust has ceased but which is expressed to extend for their benefit.

Why the change?

Trustees (including former trustees no longer in possession of the trust funds) are potentially personally liable for trust liabilities.

Uncertainty as to the reliance that can be placed on a trustee’s lien under Jersey law has led trustees parting with trust funds to seek other means of ensuring that they will be able to clawback trust assets to meet later discovered trust liabilities which they might otherwise have to meet personally.

A contractual indemnity from the recipient of trust funds in favour of the trustee has become the market standard mechanism by which to deal with that potential personal exposure to trust liabilities.

This new Article 43A acknowledges that, and clarifies which persons may rely on such an indemnity, and also that the doctrine of privity of contract will not operate to prevent those not party to such a contractual indemnity being able to enforce it.


Article 47(1)

Article 47 empowers the court to approve an arrangement varying or revoking a trust’s terms, and to enlarge trustees’ powers of management and administration of trust assets.  The court may only give such approval on behalf of persons who are not able to do so themselves (e.g. minors or unascertained beneficiaries) and if it concludes to do so would be for their benefit.

Trusts Amendment 7 will extend the scope of the court’s powers, enabling it to give approval on behalf of a person who cannot be found despite reasonable efforts to find him/her, and on behalf of a person who is a member of a class the size of which makes it unreasonable to contact that person.

Why the change?

Extending the court’s powers will enable the implementation of advantageous changes to trust arrangements which might otherwise be frustrated or delayed because beneficiaries cannot be located, or the class of beneficiaries is particularly wide.

 

Conclusion

The changes which Trusts Amendment 7 brings are evolutionary rather than revolutionary.  They add clarity and further flexibility to Jersey’s trusts legislation, thus ensuring that it remains a jurisdiction at the forefront of international wealth planning.  If you require further information or trust advice please contact Mason Birbeck mason.birbeck@parslowsinternational.com

 

Amendments to Jersey’s Trust Legislation – Article | Jersey Trusts | Parslows International

Trusts, Foundations & Private Wealth

Main contact: Mason Birbeck

Trusts, Foundations & Private Wealth

Mason Birbeck is an expert in Trust Law.  If you require any clarification on this briefing please contact him.

Trust Foundations & Private Client

UK forces public ownership registers on certain offshore jurisdictions – but not Jersey | Parslows International

 UK forces public ownership registers on certain offshore jurisdictions – but not Jersey | Parslows International

The UK Parliament has today voted in support of requiring Britain’s overseas territories (which include the BVI, Cayman Islands and Bermuda) to adopt publicly accessible registers identifying beneficial ownership of companies incorporated in those jurisdictions*.

The requirement will not however apply to Jersey.

This new UK legislation comes as a result of cross-party support for backbench amendments to the UK’s Sanctions and Anti-Money Laundering Bill passed through the Commons today.

The Overseas Territories will have until 31 December 2020 to either comply or face having the change imposed by the UK.

In a statement issued yesterday, Jersey’s Chief Minister commented that “This amendment, if passed, would properly respect our constitutional relationship [with the UK]. I believe this reflects Jersey’s leading position in having already established registers of beneficial ownership and effective procedures for information sharing that prevent the island from being used for money laundering and terrorist financing…”.

*Source FT

Trusts, Foundations & Private Wealth

Main Contact: Mason Birbeck

Head | Trusts & Private Wealth


Please note that the information provided on this website is for general information purposes only and is designed to provide you with an outline of the legal services we offer.  Whilst we endeavour to ensure our information is correct and useful, we make no representations or warranties regarding the accuracy or completeness of the information offered.  Information on our website does not constitute legal advice and Parslows International accepts no liability for any loss or damage arising out of, or in connection with, the information found in this website.  Please consult a lawyer in the event that you require professional assurance that our information, and your interpretation of the same, is correct. 
Trust Foundations & Private Client

HNW Family Structures – The Spectre of Incapacity and Undue Influence

incapacity and undue influenceHigh Net Worth Family Structures – The Spectre of Incapacity and Undue Influence

Increasing frailty of an elderly matriarch / patriarch can often be the touch paper for disputes around the division of family wealth.  Differing senses of entitlement among the younger generation’s siblings, and grievances of those who feel passed over, are so often emotive.  Assertions of incapacity and undue influence are their common bedfellows.

That nature of conflict is probably as old as mankind, and there is a long line of court cases addressing testamentary incapacity and undue influence in the context of disputed wills.

What is perhaps a more modern trend is the frequency with which assertions of incapacity and undue influence are impacting High Net Worth dynastic wealth planning structures while an elderly matriarch / patriarch is still living.

This is probably to be expected.  After all, it’s no revelation that the trend of prolonged life expectancy which many societies are experiencing is not matched by longevity of physical or mental good health.

A 2014 report produced for the Alzheimer’s Society identified that 1 in every 14 of the U.K. population aged 65 years and over, lives with dementia.  The report also identified that, if the prevalence of dementia remained the same, the number of people with dementia in the U.K. was forecast to increase to 1,142,677 by 2025 and 2,092,945 by 2051.

If an individual has, for a generation or more, been the instigator and guiding light for a family wealth structure (e.g. a trust’s settlor and protector), the spectre of alleged incapacity or undue influence can place the professional service provider in an unenviable position.

Most often, an allegation of incapacity and undue influence is taken as a vigorously refuted affront.  Understandably so, given the personal implications for the individual whose powers have been challenged, and for those others accused of manipulating them.  In such a scenario, the professional fiduciary can face particularly acrimonious family dynamics, potentially coupled with an expectation that it will seek to mediate.

Whether or not the allegations made are ultimately substantiated, once such a matter has been raised it will likely have to be put to proof.  The question of how that should be done may, of itself, not be entirely straightforward.  For example, the choice of an appropriate assessor, where both medical and legal components are critical.

Cross-jurisdictional aspects could well come into play.  The concepts of incapacity and undue influence, in the common law sense, are not universally recognised in all legal jurisdictions.  Disagreement as to the correct legal tests to be applied can arise if the jurisdiction, the laws of which govern the family wealth structure, differs from the home jurisdiction of the person alleged to be suffering incapacity and undue influence.

Once identified, the implications are not only prospective.  Historical transactions (e.g. additions of assets to a trust) may be susceptible to challenge.  At what time in the past might the alleged incapacity / undue influence have affected the validity of prior decisions?  A HNW family’s financial transactions can be frequent and complex. Even if a clear line can be drawn to demarcate those potentially susceptible to challenge, the implications of unpicking them could prove equally difficult, and costly.

Making ongoing operational decisions for the structure pending the outcome of the investigations can also be challenging.  All the more so in the absence of counsel from the individual who has been a key source of guidance over the years, and where consensus of the various other stakeholders cannot be achieved.  Especially so, if the dispute is ultimately predicated on competing financial interests and power plays surrounding the future direction of the wealth structure itself.

There are measures that can be taken to prevent or at least mitigate the effects of such potentially unsettling events.  Implementing a robust, but sufficiently flexible, governance framework for the structure, which provides for timely transition of influence to the next generation.  Ensuring clarity and openness in the family’s expectations for operation of the underlying assets and investments, and the transfer of wealth from one generation to the next.

If an individual is of very advanced years, opting for regular cognitive assessments, especially ahead of key decisions for the structure, can be evidentially important in countering assertions of incapacity.  Maintaining regular communications with family members, not just collectively but also by way of individual meetings, (so that conversations can be had free from the influence of others), can help to identify, or allay fears of, potential undue influence.

All that being said, for a professional service provider to identify conduct symptomatic of cognitive impairment or elder financial exploitation may be difficult.

As Cranworth LC observed in a 19th century English case addressing the assessment of legal capacity, “There is no mistaking midnight for noon; but at what precise moment twilight becomes darkness is hard to determine”.

Nevertheless, those administering wealth planning structures are likely to see a rise in circumstances where they face such issues, as well as potentially greater regulatory involvement in this space.  U.K regulatory bodies have been increasing their focus on the effects of an ageing population and the link with vulnerability.

The U.K. Financial Conduct Authority, for one, has set out its expectations of financial services providers.  In its paper issued in relation to venerable consumers (including those with mental health conditions), the FCA identified that, among other measures, firms should implement specific policies around cognitive impairment / decline, and ensure that client facing staff are sufficiently trained to spot signs of vulnerability and refer on to specialists where necessary.

If you require any further information, advice or assistance on this subject or regarding trust law in general please contact Mason Birbeck on mason.birbeck@parslowsinternational.com

Trusts, Foundations & Private Wealth


Main Contact: Mason Birbeck

Head | Trusts & Private Wealth


Please note that the information provided on this website is for general information purposes only and is designed to provide you with an outline of the legal services we offer.  Whilst we endeavour to ensure our information is correct and useful, we make no representations or warranties regarding the accuracy or completeness of the information offered.  Information on our website does not constitute legal advice and Parslows International accepts no liability for any loss or damage arising out of, or in connection with, the information found in this website.  Please consult a lawyer in the event that you require professional assurance that our information, and your interpretation of the same, is correct. 
Trust Foundations & Private Client

Capital Markets | Arrangers – beware potential tortuous liability owed to investors

Capital Markets | Arrangers – beware potential tortuous liability owed to investors

A recent English High Court judgment (Golden Belt 1 Sukuk Company B.S.C.(c) v BNP Paribas [2017] EWHC 3182 (Comm)) will be of interest to the capital markets community.Capital Markets | Parslows International

Though it may be a decision on its particular facts, it does establish the possibility of a duty of care being owed to investors by arrangers in structured finance transactions.  The case emphasises the importance of arrangers ensuring that they fulfil obligations which industry practice would recognise as being inherent to the transactional functions they fulfil, including establishing proper execution of transaction documents.

The court case centred around a USD650m “sukuk” (a Sharia compliant certificate comparable to a Eurobond) issued by Golden Belt, a Bahraini SPV that acted as issuer and trustee of certificate holders’ rights under the sukuk.

The ultimate economic borrower was a Saudi entity, Saad Trading, Contracting & Financial Services Company (“Saad”).  The certificate holders’ return on their investment was to be by way of rental payments made by Saad relating to land in Saudi Arabia.

The claimants in the High Court proceedings were Golden Belt, and certain holders of the certificates (New York private equity funds specialising in distressed debt) who had acquired their certificates in the secondary market after Saad had defaulted in making payments.

The defendant was BNP Paribas (BNP), involved as arranger / sole bookrunner, lead manager and part underwriter.  Its role included coordinating execution of the transaction documents for the sukuk.

Saad had issued a Saudi law governed promissory note to Golden Belt in support of its obligations under the sukuk.  Due to the uncertainty of successfully enforcing the English law governed certificates in the Saudi courts (applying Sharia law) the promissory note was a vital component to protect certificate holders in the event of a default by Saad and to enhance materially their prospects of a recovery.

Evidence submitted to the High Court established the likelihood that the promissory note was unenforceable as a matter of Saudi law as a result of it not having been executed effectively (a laser-printer signature having been used despite an original handwritten signature having been required under Saudi law).

As a consequence, Golden Belt had ceased to pursue proceedings before the Saudi Arabian Committee for the Settlement of Negotiable Instrument Disputes (CSNID) which it had commenced against Saad on the promissory note.

Consequently, the claimants asserted that they had suffered loss due to the promissory note being unenforceable and that BNP should be made liable, having failed in its duty to exercise reasonable care and skill to ensure that the promissory note had been properly executed.

BNP sought to exclude liability on the basis of the standard disclaimers in the offering circular (by which it excluded any representation or warranty and any responsibility as to the accuracy or completeness of the information in the offering circular).  The offering circular also included a warning to the effect that the existence of a secondary market for the certificates could not be guaranteed.

In his judgment, Mr Justice Males identified that responsibility for the contents of the Circular should not be conflated with responsibility for ensuring proper execution of the relevant transaction documents.  A broad disclaimer of responsibility for actions and statements of its clients, such as those made by way of an offering circular, did not necessarily mean that an arranger was also disclaiming any responsibility for the performance of its own functions.

He accepted that the certificate holders’ decision to invest through the secondary market was based in part on the assurance that, with BNP as arranger, appropriate steps would have been taken to ensure the validity of the transaction.

He held that overseeing and ensuring that the transaction documents had been properly executed was an integral part of arranging the issue.  As such, BNP did owe the funds a duty to take reasonable care to ensure that the promissory note had been properly executed, and it had breached that duty.

Further, that while Saad was BNP’s client, for all practical purposes, ensuring that the promissory note was properly executed was a service carried out entirely for the benefit of certificate holders. In this respect there was no difference between immediate purchasers of certificates and those who purchased subsequently in a secondary market after issue.

Conversely he ruled that BNP, as arranger, did not owe an equivalent duty to Golden Belt.  He concluded that Golden Belt was merely a special purpose vehicle (a “shell”, “conduit” or “brass plate”) with no economic interest of its own in the validity of the promissory note.  It had suffered no loss as a result of the invalidity of the note.

If you require any further information, advice or assistance please contact our head of Trusts & Private Wealth, Mason Birbeck on mason.birbeck@parslowsinternational.com

 

Trusts, Foundations & Private Wealth

 


Main Contact: Mason Birbeck

Head | Trusts & Private Wealth

 


Please note that the information provided on this website is for general information purposes only and is designed to provide you with an outline of the legal services we offer.  Whilst we endeavour to ensure our information is correct and useful, we make no representations or warranties regarding the accuracy or completeness of the information offered.  Information on our website does not constitute legal advice and Parslows International accepts no liability for any loss or damage arising out of, or in connection with, the information found in this website.  Please consult a lawyer in the event that you require professional assurance that our information, and your interpretation of the same, is correct. 
Trust Foundations & Private Client

UK Trusts Register

UK Trusts Register Parslows InternationalTHE UK TRUSTS REGISTER

FACT SHEET

This fact sheet issued by Parslows International highlights some key aspects of the UK trusts register introduced into UK law by the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (SI No.2017/692).

 

What is it / when was it introduced?

 

A trust database operated by HMRC in the UK from July 2017

 

What does the UK Trusts Register do?  

 

  • Holds records on relevant trusts
  • Enables trust records to be submitted and updated

 

 

Who has to register / update trust records on the UK Trusts Register?

 

 

The trustee(s) of the trust

 

Which trusts does it apply to?  

 

  • UK trusts
  • Non-UK trusts with UK tax consequences (i.e. the trust incurs UK liabilities for income tax, CGT, non-resident CGT, IHT, SDLT or SDRT)

 

Deadline for initial registration:

 

[5 December 2017]

 

Deadline for supplying / updating required data:

 

31 January after the relevant tax year

 

What type of data must be provided?

 

 

  • Details of the trust / its assets
  • Details of persons involved with the trust

 

Required details of the trust:

 

 

 

 

  • Trust name
  • Date of establishment
  • Statement of account describing assets / asset values
  • Country of tax residence
  • Place of administration
  • Names of professional advisers (e.g. legal, financial, tax advisers)

 

Whose details are recorded?  

  • Settlor(s)
  • Trustees
  • Identified beneficiaries
  • Other persons exercising effective control over the trust (and nature of control)
  • Persons identified as potential beneficiaries (e.g. in a letter of wishes)

 

What personal information does it record?  

  • Name
  • Date of birth
  • National insurance number or Unique Tax Reference Number

For non-UK residents: passport ID number / identification card number

 

 

How to register / update trust records?

 

 

With HMRC via the Trust Register Service (TRS) online portal

 

 

What happens on registration?

 

A Unique Tax Reference Number is issued
Who can access the register?  

 

Law enforcement agencies (e.g. HMRC, Financial Conduct Authority, National Crime Agency, various UK police services and the Serious Fraud Office)

 

 

Implications of failing to comply?

 

 

Civil and / or criminal penalties

 

Regulatory reporting obligations and tax law can be complex with varying application depending on individual circumstances. You should seek professional advice from relevant practitioners to your particular circumstances. The information / opinions contained in this publication do not constitute professional advice.

For further information contact Mason Birbeck on 00 44 1534 630530 or email mason.birbeck@parslowsinternational.com

 

Trusts, Foundations & Private Wealth


Main Contact: Mason Birbeck

Head | Trusts & Private Wealth

 


Please note that the information provided on this website is for general information purposes only and is designed to provide you with an outline of the legal services we offer.  Whilst we endeavour to ensure our information is correct and useful, we make no representations or warranties regarding the accuracy or completeness of the information offered.  Information on our website does not constitute legal advice and Parslows International accepts no liability for any loss or damage arising out of, or in connection with, the information found in this website.  Please consult a lawyer in the event that you require professional assurance that our information, and your interpretation of the same, is correct. 
Trust Foundations & Private Client

Trust Investment – Lessons Learned In Hard Times (2)

Trust Investment – Lessons Learned In Hard Times (2)

The recent global economic crisis proved a catalyst for breach of trust actions inter alia involving trust investment, with beneficiaries asserting that trust losses resulted from trustees’ negligence. How can the trustees of a Jersey proper law trust guard against such claims?Trust investment Parslows International

The starting point must be to understand the scope of a trustee’s powers and duties with respect to the trust assets and trust investment.

The Trusts (Jersey) Law 1984, as amended (the “Trusts Law”), gives trustees broad powers to deal with trust property and with trust investment; all the same powers as a natural person acting as beneficial owner of that property.

That legislation recognises that not every settlor will want the trustees to have such broad discretion, so trustees’ powers to deal with trust property are made subject to the terms of the trust.  Save in the case of reserved powers trusts, most modern discretionary trusts do vest trustees with very broad powers to administer the trust assets.

With power comes responsibility, and a trustee’s freedom to deal with trust assets and trust investment is made subject to irreducible duties that the legislation imposes on trustees.  A trustee must act with due diligence, as would a prudent person, to the best of his ability and skill, and observe the utmost good faith.

The Trusts Law also provides, that subject to the trust terms, a trustee shall, so far as reasonable, preserve and enhance the value of the Trust Fund. It is, however, common for trust instruments to expressly exclude these obligations.

In relation to a trustee’s investment duty, the English Court of Appeal judgment in the case of Learoyd v Whitely (1887) 12 AC 727 considered that such duty “is not to take such care only as a prudent man would take if he had only himself to consider; the duty rather is to take such care as an ordinary prudent man would take if he were minded to make an investment for the benefit of other people for whom he felt morally bound to provide.”  That is an old English case, but likely to resonate in the approach of the Jersey courts.

An appropriate investment strategy is fundamental to ensuring that the trustee meets the high standard expected.  The settlor’s rationale for establishing the trust will inform that strategy, and it must be formulated having regard to the powers conferred, and duties imposed, upon the trustee by the Trusts Law and the trust terms.

The Trusts Law does not impose an obligation on trustees to diversify trust assets, however, it may well be difficult to reconcile losses caused by lack of diversification with the fundamental obligation of prudence to which trustees must adhere.

Case authority recognises that diversification can afford protection.  In the English case of Nestle v National Westminster Bank (1996) 10(4) TLI 112 the court advocated the principle that trustee investment performance should be assessed by reference to the risk level of the entire portfolio, rather than the risk attaching to each investment in isolation.

Trustees must also consider whether they possess the necessary skills to enable them to manage the trust assets effectively.  The Jersey courts are likely to apply the general principle set out in the English case Cowan and others v Scargill and others [1985] 1 Ch 270.  Namely, if trustees do not possess the requisite expertise, then it is their duty to seek investment advice, and to act on that advice with the same degree of prudence as is imposed on them in relation to trust investments.

The Trusts Law requires that trustees only delegate their powers to investment managers whom they consider to be competent and qualified.  It also acknowledges that trustees who delegate in good faith and without neglect should not be liable for losses arising due to that delegation.

Devising a creditable investment strategy will be inadequate of itself.  Ongoing monitoring of investments and delegates is essential.  Regular reviews and reports will alert the trustees when underperformance needs to be addressed.

Being aware of investment powers and duties, formulating an appropriately diversified investment strategy, with appropriate delegation and ongoing performance monitoring, can guard against claims against trustees if investments do not perform.

For further information contact Mason Birbeck on 00 44 1534 630530 or email mason.birbeck@parslowsinternational.com

Trusts, Foundations & Private Wealth


Main Contact: Mason Birbeck

Head | Trusts & Private Wealth


Please note that the information provided on this website is for general information purposes only and is designed to provide you with an outline of the legal services we offer.  Whilst we endeavour to ensure our information is correct and useful, we make no representations or warranties regarding the accuracy or completeness of the information offered.  Information on our website does not constitute legal advice and Parslows International accepts no liability for any loss or damage arising out of, or in connection with, the information found in this website.  Please consult a lawyer in the event that you require professional assurance that our information, and your interpretation of the same, is correct.