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1、Private Wealth Newsletter 2022THIRD EDITIONEditors noteOn behalf of Baker McKenzies Global Wealth Management Practice Group,it is our pleasure to share with our clients,friends,colleagues and readers across the globe the third edition of the Private Wealth Newsletter 2022.This edition features artic
2、les on a variety of relevant recent developments in the private wealth sphere.Our key feature is from Marnin Michaels,Wealth Management Partner and Head of EMEA Tax,which explores the key questions that individuals(and their advisers)should ask themselves on planning in light of growing political in
3、stability.The article includes a personal account and advice for planning in a new world order.It reminds individuals,amongst other things,to reflect on their options for relocation and the benefits of jurisdictional risk diversification,particularly in an unstable political environment where assets
4、 could be frozen or lose their value.These planning considerations may have been part of many global families calculus during prior periods or in specific jurisdictions,but now would appear to be more relevant for all families with international connections.Since our last edition,we have also publis
5、hed an update on Wong v Grand View&others,which is contained in this edition of the Private Wealth Newsletter.The article discusses the key takeaways to be drawn from the arguments raised during the litigation that serve as a warning to settlors wishing to preserve their familys legacy in perpetuity
6、 and focusses on interesting observations arising from the first instance ruling delivered in June 2022.Sanctions remain in the front of our minds as the war in Ukraine continues and so we also provide an update on recent EU and Swiss guidance pertaining to restrictions that should be borne in mind
7、when dealing with trusts connected to Russian persons.Please do reach out to us,Elliott Murray and Phyllis Townsend,as well as any of the authors mentioned through this newsletter,with any questions or comments.Private Wealth Newsletter 2022 Third Edition2ContentsContentsElliott MurrayManaging Edito
8、rGenevaPhyllis TownsendCo-editorLondonContentsEditors note 02 ARTICLESThe new world order:Is planning back to 1989 thinking?04Wong v.Grand view&others:the first-instance judgment 08Update:EU and Swiss guidance pertaining to restrictions on trusts connected to Russian persons major impact on wealth m
9、anagement industry and clients 12Around the world 16Wealth management regional contacts 21Editorial contacts 293Private Wealth Newsletter 2022 Third Edition ContentsThe new world order:Isplanning back to 1989 thinking?In October 1991,I was living in Israel and studying at TheHebrew University.Eduard
10、 Shevardnadze,then the Minister of Foreign Affairs for the USSR,had just visited Israel and restored diplomatic relations after a 24-year hiatus following the Six-Day War.Two weeks later,the Madrid Conference,which was the first summit between Israel and the Arab States,including Jordan,Lebanon and
11、Syria,was held in Spain in an attempt to revive the Israeli-Palestinian peace process.Several days after the summit,I remember attending a conference at the university,where a well-known,highly regarded academic made a statement to the effect that“the world order has been reversed,time to throw out
12、the playbook.”Less than two months later,on 25 December 1991,the USSR collapsed in the aftermath of the revolutions in Eastern Europe.ARTICLEPrivate Wealth Newsletter 2022 Third Edition4ContentsA relative period of peace followed between 1991 and 2001.During this time,there appeared to be the beginn
13、ing of a“new world order”that was based on the set of global principles that were included in the United Nations Charter following the end of World War II(commonly referred to as the“rules-based international system”).This system is predicated on a set of principles that pertain to global security,t
14、he economy and governance.It consists of a set of rules encouraging peaceful,predictable and cooperative behavior among states,institutional bodies,such as NATO and the United Nations,that serve to uphold these rules,and the role of powerful democratic states that serve to defend the system.1 While
15、this system has always been subject to great criticism,especially in light of many regional disturbances through the years,it also is credited for contributing to the absence of a third“great-power war”for over 70 years and a drastic reduction in wartime casualties.2 As a result,this period of peace
16、 has seemingly lulled global families into thinking differently than they had done in the past.Previously,the following planning points generally were at the forefront of a familys thinking in the context of preparing for the unexpected during times of political instability:a.Do I have an exit plan
17、if things go wrong?b.What other residency and nationality options do I have?c.Do I maintain assets in a few jurisdictions just in case assets are frozen in another jurisdiction?d.Are my children sufficiently educated so that they can rebuild their lives?e.Do my children have sufficient skills to wor
18、k in another environment?f.What if I am sanctioned?1 See Jeffrey Cimmino and Matthew Kroenig,“Global Strategy 2021:An Allied Strategy for China,”available at https:/www.atlanticcouncil.org/wp-content/uploads/2021/07/Global-Strategy-2021-An-Allied-Strategy-for-China.pdf.2 Id.Thirty years of relative
19、peace and prosperity,coupled with various transparency initiatives,seem to have resulted in many people adopting new worldly viewpoints and abandoning this traditional thought process.Many people settled into a sense of global security.Yet this was not the case for all population groups,such as Sout
20、h Asia,where people have always worried about the stability in their region.Nonetheless,the perception of peace and this false sense of security that followed led many others to stop thinking about such issues and planning for the unexpected.Now,when people think about current geopolitical instabili
21、ty,they quickly think of Ukraine/Russia and Taiwan/China.However,those are not the only politically unstable regions in the world.For example,parts of Latin American and South Asia remain unstable,and one could argue that,given the vitriolic language used in the US,the US is equally unstable.It also
22、 appears that 5Private Wealth Newsletter 2022 Third Edition Contentsmany governments have moved away from adhering to the global principles that were developed after World War II.For instance,on 8 May 2022,the G7 leaders released a statement commemorating the end of World War II in Europe and the li
23、beration from fascism and the National Socialist reign of terror.In that statement,these world leaders inasmuch acknowledged that the rules-based international system failed the Ukrainian people and violated the guiding principles upon which the post Second World War system had been constructed.More
24、over,just days after Ukraine was invaded,Olaf Scholz,chancellor of Germany,described the invasion as a“Zeitenwende,”which represents a historical turning point in the rules-based international system.3 Given the growing sense of international political instability and constant threats of using nucle
25、ar weaponry,it may be time to reconsider utilizing these survival thought processes present during the Cold War era.Preparing for the unknown and the unexpected is key to survival.As such,asking yourself the following questions and exploring possible solutions could prove beneficial if such instabil
26、ity continues to evolve around the world.(1)Do I have an exit plan if things go wrong?If we learned anything from the events that unfolded with Russian and Ukraine between February and March 2022,it should be obvious that if you do not have a plan,you can get stuck.For instance,11 million people tri
27、ed to cross the Ukrainian border over a 72-hour period,and this just did not work.In fact,some people,like my sister-in-law,spent 72 hours in their car trying to cross the border.In contrast,some people,such as my mother-in-law,walked across the border in just 45 minutes.I learned of other situation
28、s where people did 3 See Dr.Bola Adediran,“The end of the rules-based international order?,”available at https:/ have the full resources to manage the 72-hour timeframe to cross the border.There are a couple of takeaways here:(1)if someone threatens to shoot,assume they mean it;and,(2)if you have to
29、 leave in a hurry,so do millions of others waiting to develop a plan does not work.It is then too late.One must think about possible exit strategies without stress and develop flexible plans that allow for variance when millions of others are trying to leave at the same time.Thus,in addition to a pr
30、imary plan,there should always be a backup plan if the first option proves unsuccessful.A simple backup plan could have resulted in more people fleeing Ukraine being prepared for the unexpected and without having to scrounge for necessities as they waited to cross the border.(2)What other residency
31、and nationality options do I have?As the Ukraine/Russia crisis unfolded,many countries quickly began creating visa options to accommodate those fleeing,but even this expedited process takes time.What was driving me was my experiences in Europe with the Yugoslavia crisis,where there were limited visa
32、s and options.A very dear friend told me that I was using the wrong analogy.Rather,the correct analogy would be the Hungarian Revolution in 1956,where all countries found a visa option to accommodate those fleeing.Once one manages to exit,they should already have in place a plan of where to go and n
33、ot have to think under pressure of where to go.Communicating this plan among family members is key,because it may be that not everyone is able to leave at the same time or from the same place.Maintaining an up-to-date passport is essential to enable one to enter another country in a hurry.Once there
34、,the focus can turn to obtaining a visa to allow one to remain for an extended period of time.Private Wealth Newsletter 2022 Third Edition6Contents(3)Do I maintain assets in a few jurisdictions just in case assets are frozen in another jurisdiction?One should always plan for the possibility that the
35、ir assets located in an unstable political environment might become frozen or even worthless.Yet,in a world of currency controls,if one needs to run,one may not need to move funds quickly to restart.One must have a fewlocations with money on hand to allow them to sustain for an indefinite period of
36、time.In a world where there is increased scrutiny of offshore structures,making sure there is simple access to funds in a few different locations that are a part of the common plan is critical to enabling one to start fresh and be successful.The locations of these funds should be coordinated with po
37、tential residency options as part of the overall plan.Another option for added flexibility might include maintaining funds in some form of digital currency.(4)Are my children sufficiently skilled/educated so that they can rebuild their lives?I personally have observed that if one does not have the p
38、ersonal skills to start again,it is nearly impossible to restart from scratch,especially in another country where one lacks sufficient language skills.Preparations for children should include learning sufficient language skills and seeking an education that is portable to other jurisdictions to enab
39、le them to rebuild anew.Again,this should be coordinated with the objectives of the overall plan,such that family members learn the languages of possible safe-haven destinations where money is on hand.One should also consider what ways they can prepare to earn a living in the safe-haven destination
40、should their stay last longer than anticipated.(5)What if I am sanctioned?Sanction means many things.It can mean one ends up on the sanctions lists.Alternatively,it can mean you can never go home again.This question requires one to weigh the risks associated with potential sanctions imposed for flee
41、ing an unstable environment with the risks of staying,which might include a lack of necessities,such as food and shelter,injuries and quite possibly the loss of life stemming from civilian casualties or being forced into combat.As such,the risk of losing ones life,or the life of a family member,shou
42、ld always outweigh any potential sanctions.ConclusionIn conclusion,we must be mindful that the geopolitical system is constantly evolving and,in some instances,it is revolving,as evidenced by peaceful times that come and go in many regions around the world.A sense of security that is present one day
43、 could be gone the next.Many government leaders and foreign policy experts have acknowledged that the rules-based international system developed following the last world war is faltering.Consequently,there is no time better than the present to plan and prepare for the unexpected.As we observed earli
44、er this year,when Russia invaded Ukraine,waiting until a crisis begins to develop an exit strategy is too late.So,ask yourself,why not take a page out of the 1989 playbook and develop an exit strategy and have a backup plan in preparation for the unexpected?Marnin MichaelsPartner,ZurichMarnin.M7Priv
45、ate Wealth Newsletter 2022 Third Edition ContentsWong v.Grand view&others:the first-instance judgmentIn the last edition of our newsletter,we discussed the Firms representation ofDr.Winston Wong,a Taiwanese businessman,scientist and philanthropist,in an 80-day virtual trial in2021.As readers will re
46、call,Dr.Wong is the eldest son of the late Taiwanese tycoon Wang Yung Ching,a.k.a.Y.C.Wang,who founded Formosa Plastics Group with his brother,Wang Yung-Tsai,in the 1950s.Since Y.C.s death in 2008,and his brothers in 2014,there has been a considerable amount of litigation and infighting between thei
47、r numerous heirs over their complex,international estates.The most recent litigation has taken place on the island of Bermuda,concerning a number of trusts that were set up there in the final years of the brothers lives,into which billions of dollars worth of assets were placed.Most of these structu
48、res are non-charitable purpose trusts incorporated under Bermudian statute,namely the Trusts(Special Provisions)Act 1989.They have certain charitable and non-charitable purposes as the objects of their trusts,but no human beneficiaries.The trustee in each case is a private trust company(PTC)incorpor
49、ated in Bermuda,managed by a small faction of(but,crucially,not all)family members,who sit on the boards.These same family members also act as enforcers and protectors,in a somewhat circular arrangement;no professional trust administrator is involved in running the structure.The trust property compr
50、ises a web of British Virgin Islands(BVI)companies that in turn hold large amounts of stock in ARTICLEPrivate Wealth Newsletter 2022 Third Edition8ContentsFormosa Plastics and other assets,valued in tens of billions of dollars.The trusts purposes,as expressed in the trust instruments,include preserv
51、ing and growing FPG,supporting the economic reforms of the Chinese government and solving all mankinds problems“from theroot.”The Wong litigation has already generated a series of judicial decisions on the question of whether a discretionary trust with apparently unfettered powers regarding the addi
52、tion and removal of beneficiaries still has a“substratum”or“beneficial core”that cannot be amended.The issue,litigated through a different set of proceedings from the main dispute,concerned a Bermudian,irrevocable,discretionary trust known as the Global Resource Trust that was settled to benefit the
53、 descendants of Y.C.and his brother.The issue in the substratum case arose because the trustee of the discretionary trust(another PTC controlled by the same small faction of favored heirs)decided to exclude all members of the Wang family as beneficiaries,appoint one of the Bermudian purpose trusts a
54、s a beneficiary and distribute all of the assets out to it,with the result that no family member could ever benefit from them.Dr.Wong successfully challenged that decision on summary judgment,a decision that was overturned in the Court of Appeal and that was then appealed to the Privy Council.The Pr
55、ivy Councils judgment is imminent.The substratum case is in financial terms at least relatively minor in the context of the overall dispute.The much larger case concerning the validity of the purpose trusts themselves was the subject of the 80-day trial last year,reported on in the last newsletter.A
56、s explained in the previous article,Dr.Wong attacked the purpose trusts and transfers of assets into them on,among others,the following grounds:He argued that the trusts should be set aside owing to a fundamental mistake,because,based on the facts,Y.C.did not understand that,once the purpose trusts
57、had been created,they could not be changed to enable his family to benefit.Dr.Wong relied on the fact that his father personally received no independent legal advice(astonishing given the value of the transactions involved),the fact that the trust documents were in English(alanguage he could not rea
58、d,speak or write)and the involvement of certain heirs and employees in whom he placed trust and confidence.Dr.Wong also argued that the Bermudian legislation does not permit a purpose trust for both charitable and non-charitable purposes:one has to choose between a non-charitable purpose trust and a
59、 charity,and the separate regimes that apply thereto.9Private Wealth Newsletter 2022 Third Edition ContentsHe further argued that the stated purposes of the trusts were verbose and unclear.Therefore,they failed the statutory test for certainty,which is that purposes must be sufficiently clear for tr
60、ust to be carried out.He further argued in a fascinating foray into the history of the settlement of the BVI that the transfers into the trusts of shares in the BVI companies should be set aside for failure to comply with the Statute of Frauds 1677,which,according to Section IX,requires transfers of
61、 equitable interest to be in writing.The judgment of Assistant Justice Kawaley was delivered in June 2022.It is 471 pages long and 191,407 words in length.By contrast,J.R.R.Tolkiens Fellowship of the Ring is a mere 187,790 words;and if the judgment were a Harry Potter book,it would be the third long
62、est in series.This article is therefore necessarily confined to a few interesting observations on the first-instance ruling.First,the judge dismissed the“mixed purposes”argument in short order.He found that it was perfectly possible in Bermuda to have a trust for both charitable and non-charitable p
63、urposes trusts.He observed that Bermudas legislation was intended to be welcoming to and easily accessible by foreign investors;it was not intended to set traps for the unwary draftsperson.Secondly,on the uncertainty case,the judge agreed that some of the purposes in the trust instruments were,on th
64、eir own,uncertain,but he applied a liberal test to whether or not that invalidated the trusts.He asked whether it is possible to tell whether a proposed application of funds is within the purposes or not,and,if it is not,does that uncertainty make it impossible to implement the entire trust?It is di
65、fficult to identify the justification for such a low bar in the statutory scheme,or to draw support for it by through an analogy with case law on traditional beneficiary trusts,because(as it was argued)it is surely fundamental to a trusts validity to know whether a particular person(or proposed purp
66、ose)is within the beneficial class or not.However,the judge again linked his reasoning back to his view of Bermuda as an open and investor-friendly jurisdiction,uninterested in creating vehicles of merely limited use by wealthy,international families.Thirdly,the Statute of Frauds argument raised the
67、 question on whether or not the legislation from the year 1677 formed part of BVI law or not.The parties agreed that this could be at least partly answered by identifying when in history the BVI could be said to have been established as a British Private Wealth Newsletter 2022 Third Edition10Content
68、scolony,because as a matter of law it would have been taken to have inherited English law as it then stood.Therefore,if the BVI were settled after 1677,the Statute of Frauds would have been absorbed into their legal system,but if they were settled before this law was passed by the parliament in Lond
69、on,then the statute would apply in Britain only.At trial,the question was explored via expert evidence from two Caribbean historians about the complicated and convoluted history of the Leeward Islands,of which the BVI forms part.In his written ruling,the judge found that the BVI were established aft
70、er 1677,so the statute applies and Section IX requires transfers of equitable interest in BVI shares to be in writing.This should have rendered the impugned transfers in this case as invalid for want of written authority from the equitable owners of the shares(i.e.,Y.C.and his brother),but the judge
71、s application of the statute to the facts is more than a little obscure it is expected to be clarified by an appellate court.The end result was that most of the trusts were upheld.One of them,set up secretly after Y.C.s death,was unsurprisingly set aside on the basis that Y.C.s estate administrator
72、did not consent to the transfer(none having been appointed).Appeals have now been filed,so this story is not yet over.Whatever the final chapter says,the Wong saga will stand as a cautionary tale for settlors who wish to preserve their familys legacy in perpetuity but decide,for whatever reason,to b
73、e less than forthright with their living relatives about their grand plans.Luke Richardson is a senior associate in the London office of BakerMcKenzie.He has worked on this case since 2013,in a team led by partner Anthony Poulton.Anthony PoultonPartner,LondonAnthony.PLuke RichardsonSenior Associate,
74、London Luke.R11Private Wealth Newsletter 2022 Third Edition ContentsKey takeaway:On 24 June 2022,the EU published updated guidance to clarify prohibitions pertaining to the provision of trust services in prior EU regulations.In certain circumstances,EU-connected service providers would be required t
75、o dissolve trusts with settlors or beneficiaries connected to Russia.Specifically,where the restructuring of a trust or a similar legal arrangement was initiated after 11 May 2022,and the EU service providers services are necessary to the operation of the trust,such trust would need to be dissolved
76、to comply with the regulations.A national competent authority can grantexceptions for operations strictly necessary forthe termination of certain contracts until 5 September 2022.On 5 July 2022,the Swiss State Secretariat for Economic Affairs(SECO)published similar guidance(see here)concerning the i
77、nterpretation of prohibitions on trusts in Article 28d of the Ordinance on Measures in Connection with the Situation in Ukraine.ARTICLEUpdate:EU and Swiss guidance pertaining to restrictions on trusts connected to Russian persons major impact on wealth management industry and clientsPrivate Wealth N
78、ewsletter 2022 Third Edition12ContentsSwiss and EU-connected service providers risk sanctions infringement in relation to trusts that were previously modified to comply with the prohibitions.Such service providers should also be careful to make only the appropriate modifications to the structure of
79、their trusts before the effective dates of the relevant legislation,such as assigning a trustee role to a trustee outside the EU/EEA/Switzerland or removing in-scope beneficiaries.It remains unclear to what extent such service providers are required to comply with the guidance retroactively.For exam
80、ple,trusts that were restructured between the time of publication of the regulations and the guidance may need to be terminated,and the assets of a settlor or beneficiary of an in-scope person subject to an asset freeze under EU sanctions may need to be frozen.Consequently,Swiss and EU-connected ser
81、vice providers of a trustee or other fiduciary and related services should consider these developments so they know how to react.The two jurisdictions have mostly converging interpretations of their restrictions,with a few exceptions.In the EU,for a trust with multiple beneficiaries and/or trustors(
82、i.e.,settlors)to be exempt from the prohibitions,all such beneficiaries and settlors would need to be exempt(e.g.,be an EU national or have a temporary or permanent residence permit in the EU)for the arrangement to be exempt from the prohibitions.Under Swiss law,a trust or similar legal arrangement
83、falls within the exception if only one beneficiary holds a temporary or permanent residence permit for,or is a national of,Switzerland,the EEA or Monaco.The Swiss guidance refers expressly only to beneficiaries,and not settlors.That said,it may be possible in either jurisdiction to obtain authorizat
84、ion from the relevant competent authority where assets are not accepted from or distributed to a person who falls within the scope of the prohibition.BackgroundSince 8 April 2022,the EU has published two regulations that amend Council Regulation(EU)No.833/2014(“Regulation”),concerning restrictive me
85、asures in view of Russias actions destabilizing the situation in Ukraine,as already amended by other recent EU regulations on Russia-related sanctions.On 9 April 2022,the EU adopted Council Regulation(EU)2022/576(“First Regulation”),which prohibits many transactions between trusts connected to Russi
86、an persons and service providers connected to the EU.See our alert here.On 3 June 2022,the EU adopted Council Regulation(EU)2022/879(“Second Regulation”)as part of a sixth sanctions package against Russia.This regulation extended certain deadlines laid down in the First Regulation and expanded certa
87、in prohibitions pertaining to trusts connected to Russia,while also providing for additional exemptions.See our alert here.On 24 June 2022,the EU published updated guidance pertaining to the prohibitions on transactions between trusts connected to Russian persons and service providers connected to t
88、he EU.On 29 June 2022,the Swiss Federal Council adopted the EUs sixth sanctions package under the Second Regulation and amended the Swiss Ordinance on Measures in Connection with the Situation in Ukraine(“Ordinance”).As is typical,the Ordinance mirrors the EU Under Swiss law,a trust or similar legal
89、 arrangement falls within the exception if only one beneficiary holds a temporary or permanent residence permit for,or is a national of,Switzerland,the EEA or Monaco.The Swiss guidance refers expressly only to beneficiaries,and notsettlors.”13Private Wealth Newsletter 2022 Third Edition Contentsrest
90、rictions,but provides different effective dates and interpretations of similar,or even identical,terms.On 5 July 2022,the SECO published similar guidance(see here)pertaining to the prohibitions on trusts as laid out in Article 28d of the Ordinance.For more information regarding the Swiss implementat
91、ion of such measures,see our posts here and here.EU and Swiss guidance1.Defining“Trust or any Similar Legal Arrangement”The EU guidance now expressly states that foundations are the civil law equivalent of a common law trust,and thus are in the scope of a“similar legal arrangement.”In contrast,the S
92、ECO has not yet clarified whether foundations and Treuhand are considered in the scope of“similar legal arrangements.”In general,the EU guidance states that there is no single definition of a trust and it is necessary to compare each arrangements structure with that of a common law trust.The hallmar
93、ks of a common law trust include a fiduciary bond between parties and a separation or disconnection of legal and beneficial ownership of assets.In addition,the EU guidance encourages reliance on a report from the European Commission to the EU Parliament and the EU Council assessing whether EU member
94、 states have duly identified“all trusts and similar legal arrangements”for the purposes of a separate EU regulation,concerning the use of the financial system for money laundering or terrorist financing.Foundations are treated as equivalent to a common law trust,as they are a civil law vehicle that
95、may be used for similar purposes.This rule is supported by Directive(EU)2015/849,which imposes on foundations the same beneficial ownership requirements as trusts and similar legal arrangements.Accordingly,persons holding equivalent positions in foundations as settlors and beneficiaries in trusts sh
96、ould be construed as being subject to the same restrictions under Article 5m.The Swiss guidance on this topic is minimal.Further,Switzerland does not have its own trust laws.As such,it is currently unclear whether certain arrangements,such as foundations and Treuhand,may be understood to be sufficie
97、ntly similar to a trust to fall within the scope of the Swiss prohibitions.2.Prohibited activities and practical implementationThe guidance clarifies that no EU person should register a trust(or similar legal arrangement),even where required by national law.The guidance contemplates the dissolution
98、of trusts already in legal existence to the extent that prohibited services are necessary for their operation.In this context,any assets to be returned or distributed to a settlor or beneficiary subject to an asset freeze under EU sanctions would need to be immediately frozen.In addition,the guidanc
99、e clarifies that the prohibitions on the provision of services apply to trusts that came into existence before and after the effective date of the relevant legislation.3.Trusts that include both Russian and non-Russian nationalsThe prohibition to register a new trust or provide trustee services only
100、 applies when a settlor or beneficiary falls under the definition of a Russian person(defined here).If such Russian person(s)are removed,the services may be provided.The EU guidance states that the prohibitions would not apply if the trust has only one trustor or one beneficiary who is a national of
101、 a member state or a natural person with a temporary or permanent residence permit in a member state.This is understood to mean that the trust is only exempt from the prohibitions Private Wealth Newsletter 2022 Third Edition14Contentsif all the beneficiaries and settlors of the trust are exempt from
102、 holding EU nationality or an appropriate residence permit.In addition,the EU guidance states that,with authorization from the relevant member state,trusts may continue to operate under the condition that the trustee does not accept from or distribute assets to a trustor or beneficiary that is an in
103、-scope Russian person.The guidance adds that exemptions for the provisions of prohibited services to trusts should be applied for on an individual basis.Relevant Swiss interpretationThe Swiss interpretation of their Ordinance largely parallels the EU guidance,but provides for different effective dat
104、es and a few notable differences.For trusts that include both Russian and non-Russian nationals,the Swiss interpretation indicates that if a trust has only one Russia-connected beneficiary among five,the prohibitions would apply.However,the prohibitions would not apply if one of the in-scope benefic
105、iaries is a citizen or holds a permanent or temporary residence permit of an exempt state.The exemption under Swiss law is broader than under EU law in that it includes not only EU member states,but also the EEA,Switzerland and Monaco.The exception would come into play where,for example,among five b
106、eneficiaries of a trust there are four Russian nationals and one person who is a citizen of both Russia and an EEA member state.The Swiss guidance does not specifically address whether the exemption applies in the case of a trustor who is a national or holds a permanent or temporary residence permit
107、 in Switzerland,the EEA or Monaco.Finally,Switzerland has not yet clarified whether foundations and Treuhand are considered in the scope of“similar legal arrangements.”Mathieu WienerAssociate,Zurich Mathieu.WMarnin MichaelsPartner,Zurich Marnin.MMeera Rolaz Associate,Geneva Meera.ROlof Knig Partner,
108、Stockholm Olof.K15Private Wealth Newsletter 2022 Third Edition ContentsAround the worldFranceTaxation in France of the sale of Brazilian predominantly real estate company shares and application of double tax treaties to social surtaxes(French Tax Supreme Court,14 April 2022,No.455943)The French Tax
109、Supreme Court confirms the analysis according to which capital gains derived from the sale of Brazilian predominantly real estate company shares are not only taxable in the state where the real estate properties are located,but also in the taxpayers state of residence.It also clarifies the applicati
110、on of double tax treaties to social surtaxes paid by French tax residents.Read moreAuthors:Agns Charpenet,Philippe Fernandes,Julie Rueda,Pauline ThiaultSpainPersonal Income Tax Supreme Court allows application of the exemption for work abroad to directors incomeThe Supreme Court was asked to determi
111、ne whether the refusal to apply the exemption set out in Article 7p of the Spanish Personal Income Tax(PIT)Law to an individual for work carried out abroad,based on their status as director,is in accordance with the law.TheSupreme Court decided that directors can benefit from this exemption in respe
112、ct of the salary they receive as a director because the law only provides that the“work”must be performed abroad for the exemption to apply.There is no requirement that the work is performed under an employment or statute-based relationship.Read moreAuthors:Divinia Rogel,Mario NavarroContents16Priva
113、te Wealth Newsletter 2022 Third EditionAround the worldEuropean UnionUpdate:sixth EU sanctions package and trusts connected to Russian persons major impact on the wealth management industry and clientsA further EU regulation on sanctions adopted on 3 June reflects the inherent difficulty in EU-conne
114、cted service providers withdrawal of servicing relationships with trusts and similar legal arrangements with settlors or beneficiaries connected to Russia.Generally,the new regulation extends the period to exit such transactions and provides for a number of new exemptions.In addition,it introduces n
115、ew restrictions on the provision of consulting services that mirror the recent US sanctions against persons located in Russia.Read moreAuthors:Marnin Michaels,Gregory Walsh,Mathieu Wiener,Meera Rolaz,Olof Knig,TatianaAyranova Hungary and the United StatesTreasury terminates tax treaty with HungaryTh
116、e US Treasury Department gave Hungary a six-month advance notice that the United States would terminate the US-Hungary tax treaty.The treaty,enforced in 1979,aims to avoid double taxation and minimize fiscal evasion.At that time,Hungarys corporate tax rate was as high as 50%.Hungary now offers a 9%c
117、orporate tax rate,the lowest across the European Union.The treasury concluded that the treaty no longer provided reciprocal benefits and left the United States with a significant loss of potential tax revenues.Read moreAuthors:Ida Varshavsky,Lily KangContents17Private Wealth Newsletter 2022 Third Ed
118、ition Around the worldArgentinaIncome tax deduction of losses deriving from trading public bonds purchased in Argentine pesos and sold in US dollarsIn Exterran Argentina SRL,dated 12 April 2022,the tax court accepted that losses deriving from trading public bonds purchased in Argentine pesos and sol
119、d in US dollars are deductible for income tax purposes.In effect,the difference between the value at which the public bonds were purchased and the value at which they were subsequently sold,at the official exchange rate,triggered a loss that is deductible for income tax purposes.Whether this decisio
120、n will be ratified by the Chamber of Appeals remains to be seen.Read moreAuthors:Martin Barreiro,Juan Pablo MennaTax on online gamblingThe Executive Branch ruled the tax on online gambling by means of Decree 293/2022 published in the Official Gazette on 2 June 2022.Read moreAuthors:Martin Barreiro,J
121、uan Pablo MennaIncome Tax Law list of low or null taxation jurisdictionsThe Federal Tax Administration(FTA)published the list of low or null taxation jurisdictions(LNTJ).Keep in mind that the Income Tax Law sets forth adverse tax implications for LNTJs,for example,(i)transactions with LNTJs are not
122、deemed arms length for transfer pricing purposes,(ii)amounts due to LNTJs in consideration for transactions that trigger Argentine-source income are deductible by the Argentine payor when the amounts are paid,(iii)transactions with LNTJs must be reported under the Tax Planning Information Regime,etc
123、.Read moreAuthors:Martin Barreiro,Juan Pablo MennaAmendment to the Income Tax Law additional tax rate on unexpected income obtained by companiesThe Executive Branch presented a bill,which will soon be sent to Congress,that taxes companies“unexpected income.”This bill establishes an additional tax ra
124、te of 15%on income tax applicable to companies and the permanent establishments of foreign companies that meet certain requirements provided by this bill.Read moreAuthors:Martin Barreiro,Juan Pablo Menna Increase from 35%to 45%the collection regime on certain operations reached by the Tax on the Acq
125、uisition of Foreign CurrencyResolution No.5232/2022 was published in the Official Gazette,whereby the Federal Tax Authority(FTA)increased,from 35%to 45%,the collection regime applicable to the acquisition of goods or services abroad reached by the Tax on the Acquisition of Foreign Currency.Read more
126、Authors:Martin Barreiro,Juan Pablo Menna Contents18Private Wealth Newsletter 2022 Third EditionAround the worldMalaysiaEnhanced transparency in LabuanFollowing the developments to the Labuan tax regime through the introduction of economic substance requirements in 2019,the Labuan Companies(Amendment
127、)Act 2022 came into effect on 10 June 2022 to amend the Labuan Companies Act 1990(LCA)(“Amendments”).These further developments to the Labuan corporate and regulatory regime clearly highlight Malaysias commitment towards adhering to international legal standards of corporate governance and transpare
128、ncy.In this client alert,we focus on some of the key Amendments introduced,such as the introduction of the beneficial ownership reporting regime and the prohibition on issuance of bearer shares.Read moreAuthors:Adeline Wong,Istee CheahContents19Private Wealth Newsletter 2022 Third Edition United Sta
129、tesCongress passes tax provisions in CHIPS Bill;Inflation Reduction ActCongress engaged in a flurry of legislative activity,enacting two bills that contain important tax provisions.The CHIPS Act,intended to boost American semiconductor research,development,and production,includes an investment tax c
130、redit for manufacturing semiconductors and related equipment in new Code Section 48D,while the Inflation Reduction Act is a significantly slimmed-down version of the Build Back Better Act and contains a much more limited number of tax provisions.Notably,nothing in the Inflation Reduction Act impleme
131、nts Pillars One or Two in the US.Read moreAuthors:Alexandra MinkovichAround the worldContents20Private Wealth Newsletter 2022 Third EditionWealth management regional contactsAustralia Melbourne Level 19 CBW 181 William Street Melbourne Victoria 3000 Australia Tel:+61 3 9617 4200 Fax:+61 3 9614 2103
132、John WalkerSydney Tower One-International Towers Sydney Level 46,100 Barangaroo Avenue Sydney NSW 2000 Australia Tel:+61 2 9225 0200 Fax:+61 2 9225 1595 John WalkerChina Beijing Suite 3401,China World Office 2,China World Trade Center 1 Jianmguomenwai Dajie Beijing 100004,Peoples Republic of China T
133、el:+86 10 6535 3800 Fax:+86 10 6505 2309 Jason WenShanghai Unit 1601,Jin Mao Tower,88 Century Avenue,Pudong,Shanghai 200121 Peoples Republic of China Tel:+86 21 6105 8558 Fax:+86 21 5047 0020 Nancy LaiHong Kong Hong Kong 14th Floor,One Taikoo Place,979 Kings Road,Quarry Bay,Hong Kong SAR Tel:+852 28
134、46 1888 Fax:+852 2845 0476 Steven Sieker Pierre Chan Noam Noked Lisa MaIndonesia Jakarta HHP Law Firm Pacific Century Place,Level 35 Sudirman Central Business District Lot 10 Jl.Jendral Sudirman Kav 52-53 Jakarta 12190 Indonesia Tel:+62 21 2960 8888 Fax:+62 21 2960 8999 Ria MuhariastutiJapan Tokyo A
135、rk Hills Sengokuyama Mori Tower,28th Floor 1-9-10,Roppongi,Minato-ku Tokyo 106-0032 Japan Tel:+81 3 6271 9900 Fax:+81 3 5549 7720 Edwin Whatley Ryutaro Oka ASIA PACIFIC 21Private Wealth Newsletter 2022 Third Edition ContentsMalaysia Kuala Lumpur Wong&Partners,Level 21,The Gardens South Tower Mid Val
136、ley City Lingkaran Syed Putra Kuala Lumpur 59200 Malaysia Tel:+60 3 2298 7888 Fax:+60 3 2282 2669 Istee Cheah Adeline WongPhilippines Manila Quisumbing Torres,16th Floor,One/NEO Building 26th Street Corner 3rd Avenue Crescent Park West Bonifacio Global City Taguig City 1634 Philippines Tel:+63 2 881
137、9 4700 Fax:+63 2 8816 0080;7728 7777 Kristine Anne Mercado-TamayoSingapore Singapore 8 Marina Boulevard#05-01 Marina Bay Financial Centre Tower 1 Singapore 018981 Singapore Dawn Quek Enoch Wan Jaclyn Toh Pamela YeoTaiwan Taipei 15th Floor,Hung Tai Center 168 Dunhua North Road Taipei 105405 Taiwan Te
138、l:+886 2 2712 6151 Fax:+886 2 2712 8292 Michael Wong Dennis Lee Peggy ChiuThailand Bangkok 25th Floor Abdulrahim Place 990 Rama IV Road Bangkok 10500 Thailand Tel:+66 2666 2824 Fax:+66 2666 2924 Panya Sittisakonsin Nitikan RamanatVietnam Hanoi Unit 1001,10th floor,Indochina Plaza Hanoi 241 Xuan Thuy
139、 Street,Cau Giay District Hanoi 10000 Vietnam Tel:+84 24 3825 1428 Fax:+84 24 3825 1432 Thanh Hoa DaoPrivate Wealth Newsletter 2022 Third Edition22ContentsAustria Vienna Schottenring 25 1010 Vienna,Austria Tel:+43 1 24 250 Fax:+43 1 24 250 600 Christoph UrtzBahrain Manama 18th Floor,West Tower Bahra
140、in Financial Harbor PO Box 11981,Manama Kingdom of Bahrain Tel:+973 1710 2000 Fax:+973 1710 2020 Ian SiddellBelgium Brussels Manhattan Bolwerklaan 21 Avenue du Boulevard Brussels 1210 Belgium Tel:+32 2 639 36 11 Fax:+32 2 639 36 99 Alain Huyghe Julie PermekeCzech Republic Prague Praha City Center,Kl
141、imentsk 46 Prague 110 00 Czech Republic Tel:+420 236 045 001 Fax:+420 236 045 055 Eliska KominkovaFrance Paris 1 rue Paul Baudry 75008 Paris,France Tel:+33 1 44 17 53 00 Fax:+33 1 44 17 45 75 Agns Charpenet Philippe Fernandes Pauline Thiault Julie RuedaGermany Berlin Friedrichstrasse 88/Unter den Li
142、nden 10117 Berlin Germany Tel:+49 30 22 002 810 Fax:+49 30 22 002 811 99 Wilhelm HebingFrankfurt Bethmannstrasse 50-54 60311 Frankfurt/Main,Germany Tel:+49 69 29 90 8 0 Fax:+49 69 29 90 8 108 Sonja Klein Ludmilla MaurerHungary Budapest Dorottya utca 6.1051 Budapest Hungary Tel:+36 1 302 3330 Fax:+36
143、 1 302 3331 Gergely Riszter Timea BodrogiEUROPE,MIDDLE EAST&AFRICA23Private Wealth Newsletter 2022 Third Edition ContentsItaly Milan Piazza Meda,3 Milan 20121,Italy Tel:+39 02 76231 1 Fax:+39 02 76231 620 Francesco Florenzano Barbara FainiRome Viale di Villa Massimo,57 00161 Rome,Italy Tel:+39 06 44
144、 06 31 Fax:+39 06 44 06 33 06Luxembourg Luxembourg 10-12 Boulevard Roosevelt L-2450 Luxembourg Tel:+352 26 18 44 1 Fax:+352 26 18 44 99 Diogo Duarte de Oliveira Amar Hamouche Elodie Duchene Olivier Dal Farra Miguel Pinto de Almeida Julien Schraub Andrea Addamiano Pierre-Luc Wolff Elisa Ortuno Franoi
145、s-Xavier ForayMorocco Casablanca Ghandi Mall-Immeuble 9 Boulevard Ghandi 20380 Casablanca Morocco Tel:+212 522 77 95 95 Fax:+212 522 77 95 96 Kamal Nasrollah Keltoum BoudribilaPoland Warsaw Rondo ONZ 100-124 Warsaw,Poland Tel:+48 22 445 31 00 Fax:+48 22 445 32 00 Piotr WysockiQatar Doha Al Fardan Of
146、fice Tower 8th Floor,Al Funduq 61 Doha,Qatar Tel:+974 4410 1817 Fax:+974 4410 1500 Ian SiddellSaudi Arabia Jeddah Advisers(Abdulaziz I.AlAjlan&Partners in association with Baker&McKenzie Limited)Bin Sulaiman Center 6th Floor,Office No.606 Al Khalidiyah District,P.O.Box 40187 Prince Sultan St.and Raw
147、dah St.Intersection Jeddah 21499 Saudi Arabia Tel:+966 12 606 6200 Fax:+966 12 692 8001 Basel BarakatRiyadh Legal Advisers(Abdulaziz I.AlAjlan&Partners in association with Baker&McKenzie Limited)Olayan Complex Tower II,3rd Floor Al Ahsa Street,Malaz P.O.Box 69103 Riyadh 11547 Saudi Arabia Tel:+966 1
148、1 265 8900 Fax:+966 11 265 8999 Karim NassarPrivate Wealth Newsletter 2022 Third Edition24ContentsSpain Barcelona Avda.Diagonal,652 Edif.D,8th Floor Barcelona 08034 Spain Tel:+34 93 206 0820 Fax:+34 93 205 4959 Bruno Dominguez Esteban Raventos Davinia Rogel Meritxell SanchezMadrid Edificio Beatriz C
149、alle de Jos Ortega y Gasset,29 Madrid 28006 Spain Tel:+34 91 230 4500 Fax:+34 91 391 5149 Luis Briones Antonio Zurera Jaime Martnez-iguez Esther Hidalgo Bruno Keusses Jaime Canovas Mara ConcepconSouth Africa Johannesburg 1 Commerce Square 39 Rivonia Road Sanhurst Sandton Johannesburg,South Africa Te
150、l:+27 11 911 4300 Fax:+27 11 784 2855 Denny Da SilvaSweden Stockholm P.O.Box 180 SE-101 23 Stockholm SwedenVisiting address:Vasagatan 7,Floor 8 SE-111 20 Stockholm Sweden Tel:+46 8 566 177 00 Fax:+46 8 566 177 99 Linnea BackSwitzerland Geneva Esplanade Pont-Rouge 2 Grand-Lancy,Geneva 1212 Switzerlan
151、d Tel:+41 22 707 9800 Fax:+41 22 707 9801 Elliott MurrayZurich Holbeinstrasse 30 Zurich 8034 Switzerland Tel:+41 44 384 14 14 Fax:+41 44 384 12 84 Marnin Michaels Lyubomir Georgiev Tobias Rohner Gregory Walsh Richard Gassmann Andrea Bolliger Caleb Sainsbury Chelsea Hunter Ida Varshavsky Nathan Bouvi
152、er Alexandra Garg Jacopo Crivellaro Mathieu Wiener Ryan SciortinoThe Netherlands Amsterdam Claude Debussylaan 54 1082 MD Amsterdam P.O.Box 2720 1000 CS Amsterdam The Netherlands Tel:+31 20 551 7555 Fax:+31 20 626 7949 Maarten Hoelen Isabelle BronzwaerTurkey Istanbul Esin Attorney Partnership Ebulula
153、 Mardin Cad.,Gl Sok.No.2,Maya Park Tower 2,Akatlar-Beikta Istanbul 34335,Turkey Tel:+90 212 339 8100 Fax:+90 212 339 8181 Erdal Ekinci Gunes Helvaci25Private Wealth Newsletter 2022 Third Edition ContentsUkraine Kyiv Operating remotely Hennadiy Voytsitskyi Roman KorenUnited Arab Emirates Abu Dhabi Le
154、vel 8,Al Sila Tower Abu Dhabi Global Market Square Al Maryah Island,P.O.Box 44980 Abu Dhabi United Arab Emirates Tel:+971 2 696 1200 Fax:+971 2 676 6477 Borys DackiwDubai Level 14,O14 Tower Al Abraj Street Business Bay,P.O.Box 2268 Dubai United Arab Emirates Tel:+971 4 423 0000 Fax:+971 4 447 9777 M
155、azen Boustany Reggie MezuUnited Kingdom London 100 New Bridge Street London EC4V 6JA United Kingdom Tel:+44 20 7919 1000 Fax:+44 20 7919 1999 Ashley Crossley Anthony Poulton Gemma Willingham Yindi Gesinde Phyllis Townsend Christopher Cook Meghna Deo Alfie Turner Rachael Cederwall Luke RichardsonPriv
156、ate Wealth Newsletter 2022 Third Edition26ContentsArgentina Buenos Aires Cecilia Grierson 255,6th Floor Buenos Aires C1107CPE Argentina Tel:+54 11 4310 2200 Fax:+54 11 4310 2299 Martin Barreiro Gabriel Gomez-GiglioBrazil Sao Paulo Trench Rossi Watanabe Rua Arq.Olavo Redig de Campos,105 31th floor Ed
157、ifcio EZ Towers Torre A 04711-904 So Paulo-SP-Brazil Tel:+55 11 3048 6800 Fax:+55 11 5506 3455 Alessandra S.Machado Simone Musa Adriana Stamato Clarissa Machado Flavia Gerola Marcelle SilbigerChile Santiago Avenida Andrs Bello 2457,Piso 19 Providencia,CL 7510689 Santiago Chile Tel:+56 2 2367 7000 Al
158、berto MaturanaColombia Bogota Carrera 11 No.79-35 piso 9 Bogot,D.C.110221 Colombia Tel:+57 60 1 634 1500;+57 60 1 644 9595 Ciro Meza Juan David VelascoPeru Lima Estudio Echecopar Av.Los Conquistadores 1118 Piso 6,San Isidro 15073 Peru Tel:+51 1 618 8500 Fax:+51 1 372 7374 Rolando Ramirez GastonMexic
159、o Mexico City Edificio Virreyes Pedregal 24,12th floor Lomas Virreyes/Col.Molino del Rey Mxico City,11040 Mexico Tel:+52 55 5279 2900 Fax:+52 55 5279 2999 Jorge Narvaez-Hasfura Javier Ordonez-Namihira Lizette Tellez-De la VegaVenezuela Caracas Centro Bancaribe,Interseccin Avenida Principal de Las Me
160、rcedes con inicio de Calle Pars,Urbanizacin Las Mercedes Caracas 1060 Venezuela Tel:+58 212 276 5111 Fax:+58 212 993 0818;993 9049 Ronald EvansLATIN AMERICA27Private Wealth Newsletter 2022 Third Edition ContentsCanada Toronto 181 Bay Street Suite 2100 Toronto,Ontario M5J 2T3,Canada Tel:+1 416 863 12
161、21 Fax:+1 416 863 6275 Peter ClarkUnited States Chicago 300 East Randolph Street Suite 5000 Chicago,Illinois 60601 United States Tel:+1 312 861 8800 Fax:+1 312 861 2899 Richard LiptonDallas 1900 North Pearl Street Suite 1500 Dallas,Texas 75201 United States Tel:+1 214 978 3000 Fax:+1 214 978 3099 Bo
162、bby Albaral Jacqueline TitusHouston 700 Louisiana Suite 3000 Houston,Texas 77002 United States Tel:+1 713 427 5000 Fax:+1 713 427 5099 Rodney ReadLos Angeles 10250 Constellation Blvd Suite 1850 Los Angeles,CA 90067 United States Tel:+1 310 201 4728 Fax:+1 310 201 4721 Mike ShaikhMiami 1111 Brickell
163、Avenue Suite 1700 Miami,Florida 33131 United States Tel:+1 305 789 8900 Fax:+1 305 789 8953 James Barrett Bobby Moore Jeff Rubinger Pratiksha Patel Matthew SlootskyNew York 452 Fifth Avenue New York,New York 10018 United States Tel:+1 212 626 4100 Fax:+1 212 310 1600 Simon Beck Paul DePasquale Glenn
164、 Fox Rebecca Lasky Olga SandersPalo Alto 600 Hansen Way Palo Alto,California 94304 United States Tel:+1 650 856 2400 Fax:+1 650 856 9299 Scott FrewingWashington,DC 815 Connecticut Avenue,N.W.Washington,District of Columbia 20006 United States Tel:+1 202 452 7000 Fax:+1 202 452 7074 George Clarke NOR
165、TH AMERICAPrivate Wealth Newsletter 2022 Third Edition28ContentsPeggy ChiuAsia Pacific Regional Editor TaipeiTel:+886 2 2715 7282Peggy.CMartin BarreiroLatin America Regional Editor Buenos AiresTel:+54 11 4310 2230Martin.BElliott MurrayManaging Editor,GenevaTel:+41 22 707 98 39 Elliott.MPhyllis Towns
166、endCo-editor,LondonTel:+44 20 7919 1360Phyllis.TGemma WillinghamEMEA Regional Editor LondonTel:+44 20 7919 1527Gemma.WRodney ReadNorth America Regional Editor HoustonTel:+1 713 427 5053Rodney.RContents29Private Wealth Newsletter 2022 Third Edition For further information regarding the newsletter,ple
167、ase contact:Julie BarlinParisTel:+33 1 4417 5397 Julie.BWinggy GallardoManilaTel:+63 2 8558 9325Winggy.GEditorial ContactsBaker McKenzie delivers integrated solutions tocomplex challenges.Complex business challenges require an integrated response across different markets,sectors and areas of law.Bak
168、erMcKenzies client solutions provide seamless advice,underpinned by deep practice and sector expertise,as well as first-rate local market knowledge.Across more than 70offices globally,Baker McKenzie works alongside our clients to deliver solutions for a connected 2022 Baker McKenzie.All rights reser
169、ved.Baker&McKenzie International is a global law firm with member law firms around the world.In accordance with the common terminology used in professional service organizations,reference to a“partner”means a person who is a partner or equivalent in such a law firm.Similarly,reference to an“office”means an office of any such law firm.This may qualify as“Attorney Advertising”requiring notice in some jurisdictions.Prior results do not guarantee a similar outcome.Contents