Custodial institutions and fiduciary structures may both “hold assets,” but legally they are completely different. The distinction comes down to the relationship, the level of discretion, and who is allowed to act on behalf of the owner. Under EU regulations, this difference determines why custodians remain allowed for Russians, while fiduciary services are banned.

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• Holds assets securely.
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• Cannot touch, manage, or move anything without explicit instruction.
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• Their duty is pure safekeeping.
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• Authorized to make decisions for your benefit.
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• Can buy, sell, and manage assets without constant permission.
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• Their duty is loyalty and prudent management.
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• Custodian: Principal–Agent or Bailor–Bailee. A contract for safekeeping and execution of instructions.
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• Fiduciary: Fiduciary–Beneficiary. A relationship of trust requiring good faith.
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• Custodian: Safekeeping and exact execution of instructions.
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• Fiduciary: Loyalty and prudence in managing assets.
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• Custodian: No discretion. Cannot make independent decisions.
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• Fiduciary: High discretion. Expected to make judgment calls.
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• Custodian: Holder of assets; operational, mechanical role.
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• Fiduciary: Manager of assets; judgment and strategy.
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• Custodian: Banks, brokerages, central securities depositories.
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• Fiduciary: Trusts (trustees), estates (executors), guardianships.
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• Custodian: Negligence — loss of assets or failure to follow instructions.
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• Fiduciary: Breach of fiduciary duty — conflicts, self-dealing, bad decisions.
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• Custodian: The client owns assets directly and gives instructions.
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• Fiduciary: The fiduciary controls assets; beneficiaries benefit but often do not control.
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Top Company (Custodial Institution)

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• The company’s articles and memorandum allow its shares to transfer automatically to designated third parties (typically family members) upon the shareholder’s death.
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• This mechanism does not create a trust, because there is no fiduciary relationship—only a custodial structure.
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• Therefore, it does not fall under EU trust-related sanctions, which target fiduciary and trust-like arrangements.
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• The company’s place of effective management (POEM) is in Svalbard, a CRS non-participating jurisdiction.
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• As a result, the top company is treated as a Non-Reporting Financial Institution (FI) for CRS purposes and has no CRS reporting obligations.
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• Its CRS classification is driven entirely by its activities and professional management, not by the tax residency of its shareholders.
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• Because the bottom company’s portfolio is professionally managed by a bank (a Financial Institution), it is classified as an:
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• Investment Entity (Professionally Managed)
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• This makes it a Financial Institution for CRS purposes, regardless of who owns it.
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• The bottom company has one equity holder: the top company (a non-reporting custodial FI located in Svalbard).
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Under CRS rules:

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• An equity interest held by a Financial Institution is not a “Financial Account”,
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• unless the entity is an Investment Entity in a non-participating jurisdiction.
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• Here, the shareholder is an FI in a non-participating jurisdiction, but not an Investment Entity.
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• Therefore, the holding is not a reportable account.
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3. The top company is a Non-Reporting FI located in a CRS non-participating jurisdiction (Svalbard).
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7. The bottom Investment Entity sees its owner as a Non-Reporting FI.
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11. Because of this, the bottom company:
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• Does not look through the top company,
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• Does not identify controlling persons,
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• Does not report the ultimate Russian shareholder under CRS.
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4. The Russian resident owner is not reported because the ownership is held through a recognized FI in a CRS-non-participating jurisdiction.
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8. No Exchange on Demand (EoD) applies because the Person with Significant Control (PSC) is resident in Svalbard — a territory with no tax information exchange agreements whatsoever due to treaty...

While custodians and fiduciaries are closely related, they serve fundamentally different roles in wealth management and trust structures. Importantly: all fiduciaries are custodians in some sense, but not all custodians are fiduciaries.

Role: Safeguard and protect client assets.

Core Function: Holding assets securely against loss, theft, or error.

Key Responsibilities:

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• Physical and electronic safekeeping of assets
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• Settling trades and processing corporate actions (dividends, stock splits)
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• Providing accurate statements and transaction records
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Standard of Care: High duty of care focused on security and accuracy.

Analogy: Like a bank’s safety deposit box—keeps valuables safe, but doesn’t decide what to do with them.

Role: Act in the client’s best interest.

Core Function: Provide advice or make decisions for the sole benefit of the client.

Key Responsibilities:

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• Actively managing portfolios
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• Exercising discretion over assets
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• Ensuring decisions align with the client’s objectives
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Standard of Care: Fiduciary duty — the highest legal standard, encompassing:

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• Duty of Loyalty: Client’s interests come first
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• Duty of Care: Prudent, informed decisions
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• Duty of Good Faith: Honesty and fairness
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Analogy: A financial advisor or trustee who manages your portfolio according to your goals.

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• Custodian: Holds and safeguards assets; client retains decision-making power.
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• Fiduciary: Actively manages assets and makes decisions in the client’s best interest.
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Overlap:

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• Firms like Fidelity or Vanguard are custodians for client accounts but act as fiduciaries when managing portfolios.
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• A trustee is both a custodian and a fiduciary: safeguarding assets while managing them for beneficiaries’ benefit.
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Takeaway:

Think of custodians as safe hands and fiduciaries as trusted decision-makers. The distinction is crucial for wealth planning, legal compliance, and understanding your protections and responsibilities.

In this episode, we break down the EU’s crackdown on Russian-linked trusts — now widely referred to as “zombie trusts” — following amendments to Article 5m of Council Regulation (EU) 833/2014. These rules have rendered many existing structures legally unserviceable and have effectively shut the door to new trust formation involving Russian nationals or entities.

Key Points Covered:

Under the amended regulation, EU persons and service providers are barred from registering, hosting, or managing trusts where any of the following are involved:

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• A Russian national or Russia resident
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• A Russian legal entity
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• Any entity owned (over 50%) by such persons
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• Any entity controlled by such persons
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• Anyone acting on behalf of the above
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This covers both natural persons and corporate structures, making the rule extremely broad.

EU persons cannot:

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• Act as trustee, nominee shareholder, director, secretary, or similar
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• Register a trust
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• Provide a registered office, business address, administrative address, or management services
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For many existing structures, this has created “zombie trusts” — trusts that still legally exist but cannot be administered or serviced inside the EU.

The EU provides no unified definition, but any structure with:

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• A fiduciary relationship
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• Separation of legal vs. beneficial ownership
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…may fall under the same restriction.

Guidance comes from:

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• AML Directive (EU) 2015/849
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• Commission reports on trust-equivalent arrangements
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Importantly, Article 5m’s scope is wider than the AML definition — capturing more structures, more situations, and more service providers.

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• New trusts cannot be registered.
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• Existing trusts cannot receive ongoing service (trustee, office address, administration).
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• Many trusts are now effectively frozen unless moved outside the EU.
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• Professional trustees in the EU are legally obligated to exit these relationships, often abruptly.
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These structures:

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• Still exist legally
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• Cannot operate
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• Cannot be dissolved or restructured...

In this episode, we explore how wealthy Russians are responding to the tightening global network of financial transparency — particularly the Common Reporting Standard (CRS) and the Automatic Exchange of Information (AEOI). These frameworks have dramatically reduced financial secrecy, forcing individuals to adapt quickly or risk exposure to Russian tax authorities and enforcement actions.

Key Discussion Points:

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3. Formalizing Emigration:
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• Breaking Russian tax residency is the first line of defense.
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• Steps include spending fewer than 183 days in Russia, proving that one’s “centre of vital interests” (family, home, business) is outside Russia, and — in extreme cases — renouncing citizenship.
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• Failure to formalize emigration leaves individuals subject to Russia’s worldwide taxation rules.
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4. Choosing “Safe” Jurisdictions:
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• Individuals are relocating to countries perceived as low-risk or outside the CRS network.
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• Some still pursue “quiet” jurisdictions that are less transparent, though these options increasingly carry higher compliance risks and reputational exposure.
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4. Building Complex Asset Structures:
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• Wealth is being shielded through multi-layered arrangements — companies, trusts, and foundations spread across multiple jurisdictions.
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• The goal is to make it difficult for any one country to reconstruct the full picture of ownership or to comply fully with data requests under Exchange on Request (EoR).
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4. Asset Diversification:
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• Moving wealth into asset classes not yet fully captured by AEOI or CARF, such as:
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• Real estate (although OECD’s new Framework for AEOI on immovable assets is closing this gap)
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• Art and collectibles
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• Precious metals
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• Digital assets, such as cryptocurrency — though CARF is expanding to cover these as well.
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Conclusion:

For many exiled or internationally mobile Russians, AEOI represents a systemic threat — automatic visibility of their assets to Moscow. Meanwhile, EoR poses an individualized, targeted threat that can be used for political or legal retaliation.

Their defensive strategy has become a race: to sever fiscal ties to Russia and restructure wealth before the state weaponizes global transparency tools.

Takeaway:

The age of anonymous cross-border wealth is ending. Russian nationals — like all global citizens — must adapt their financial strategies to a world where transparency is the rule, not the exception.

We examine why many wealthy Russians are especially worried about global information-exchange regimes. The Common Reporting Standard (AEOI/CRS) and Exchange-on-Request (EoR) create layered visibility that can expose residency, assets, and financial flows — with consequences ranging from tax assessments to targeted investigations. Host countries that once offered anonymity now participate in automatic reporting, and requests from foreign authorities can probe ownership, trusts, and transaction histories. For those with ties to Russia, the combination of CRS reporting and Russia’s own residency rules can create unexpected exposure and legal risk.

Key Points Covered:

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• AEOI / CRS “blast radius”: Automatic periodic sharing of account data (balances, interest, dividends, gross sale proceeds) means losing prior anonymity in many host jurisdictions (e.g., UAE, Turkey, Armenia, Georgia, Kazakhstan as they join reporting regimes).
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• Russian residency risk: Russia’s residency tests (183+ days or “center of vital interests”) can result in host-country data being reported back to Russian authorities, potentially triggering tax or regulatory action.
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• Exchange on Request (EoR) “targeted missile”: Narrow, case-specific information requests enable authorities to dig into beneficial ownership, trust records, and detailed transactions — a tool that can be used against high-risk individuals, including dissidents.
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• Practical exposures: AEOI reveals account balances and income; EoR can access detailed ownership and transactional evidence useful for tax audits, currency-control probes, and other enforcement actions.
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• Mitigation needs: Effective responses combine focused tax, legal, and privacy planning—substance, documentation, treaty analysis, and proactive compliance are central to risk management.
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Why It Matters:

For internationally mobile individuals with ties to Russia, the convergence of automatic and request-based information exchange has dramatically reduced secrecy options and increased legal risk. Understanding how AEOI and EoR interact with domestic residency rules is essential for planning, compliance, and risk mitigation.

Takeaway:

Transparency regimes have enlarged the “blast radius” around cross-border wealth. Anyone with potential exposure should seek specialist tax, legal, and privacy advice immediately — not to evade law, but to align structures with reporting realities and limit unintended consequences.

In this episode, we explore how certain jurisdictions remain outside the reach of CARF (Crypto-Asset Reporting Framework) — and why Svalbard and UK non-resident trusts continue to offer unique confidentiality advantages.

Key Insights:

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• Svalbard’s Unique Legal Shield
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• Under Article 8 of the 1925 Treaty of Svalbard, no signatory nation may receive tax benefits or preferential treatment related to Svalbard activities.
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• This means Svalbard cannot enter into tax treaties without breaching the principle of equal treatment among its 48 signatories — a list that includes Russia, China, and North Korea.
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• The result: Svalbard sits outside global tax-sharing agreements, including those underpinning CARF and CRS frameworks.
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• The UK’s Non-Resident Trust Advantage
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• The United Kingdom will not abolish its non-resident trust structure, a longstanding tool in international tax and estate planning.
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• A non-resident trust is governed by UK law but has trustees based outside the UK.
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• This allows for continued privacy and tax efficiency under UK rules — making such trusts valuable for asset protection and wealth transfer planning, even in an era of global transparency.
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Why It Matters:

While CARF expands global financial reporting, legal structures in Svalbard and the UK illustrate how specific jurisdictions remain beyond its direct reach — offering insights into the future of confidentiality and tax-neutral planning.

In this episode, we explain who must report under the Crypto-Asset Reporting Framework (CARF) — and why understanding your role is critical for compliance.

Key Takeaways:

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• RCASP Defined:
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• A Reporting Crypto-Asset Service Provider (RCASP) is any individual or entity that enables or carries out crypto exchange transactions on behalf of clients as a business.
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• Entities Typically Considered RCASPs:
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3. Centralized crypto exchanges (with or without custody services)
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7. Crypto brokers and dealers (acting as intermediaries or counterparties)
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11. Token issuers (creating and issuing crypto assets)
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15. Crypto-asset ATM operators
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19. Market makers
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23. Software providers only if they operate an exchange; app developers alone are excluded
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27. Decentralized exchanges (DEXs) where the operator exercises control or governance
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31. DAOs (Decentralized Autonomous Organizations) without legal recognition
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35. Businesses reselling crypto assets to customers
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• Who Is NOT an RCASP:
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• Individuals or entities offering services infrequently or non-commercially
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• Platforms that only list prices or facilitate information without executing transactions
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• Developers or sellers of trading apps or software that are not used to execute transactions
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Why It Matters:

CARF holds RCASPs directly responsible for reporting transactions to authorities. Understanding whether you qualify as an RCASP is essential, because misclassification can lead to regulatory scrutiny and penalties.