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BICE as Trustee

The BICE plays a leading role in the management of trusts aimed at the development of strategic industries for the generation of goods and services. It operates in various areas, including energy, transport, tourism, housing, consumption, and services.

What is a Trust?

The Argentine Law defines the existence of a trust as the situation «when an individual or a legal entity (trustor) transfers one or more assets in trust property to another party (trustee), who in turn undertakes the obligation to exercise such property for the benefit of the party specified in the relevant agreement (beneficiary) and to transfer it to the trustor, beneficiary or final beneficiary upon the expiration of a specified term or the fulfillment of a specified condition.”

This recycled Roman-law institution determines that a party, the «trustor,» transfers title to certain assets to another party, the “trustee owner,” so that the latter manages them for the benefit of a third party, the «beneficiary,» and, after a term has elapsed or a condition has been fulfilled, they transfer it to a fourth party, the “final beneficiary.”

This final beneficiary is the party to whom the assets must be handed over when the term of the trust expires or the condition that gave rise to it has been fulfilled. The final beneficiary may be either the trustor or the beneficiary.

The trustor is the party that transfers the property or interests that are to be held in trust. Likewise, this party is the one that identifies the assets that are the subject matter of the trust, states the purpose of the trust, terminates the trust, and appoints the trustee and the beneficiary.

 

In turn, the trustee is the party that receives the assets or interests transferred by the trustor and undertakes the obligation of executing the trust by fulfilling the assignment that constitutes its purpose.

The rights of the trustee include the reimbursement of expenses and a compensation, the right to arrange and encumber the assets in trust, and to exercise any actions that may be necessary in protecting the assets held in trust.

For investors, the trust is presented as a safe alternative for their placements, since it allows them to separate the assets of a certain estate and affect them for a specific purpose.

In this way, the assets held in a trust are not pooled with those of the party managing it and can be deployed as directed by the party that created the trust.

This business model—which moves around 5 quintillion dollars globally—stipulates that the transfer of the title to the assets made by the trustor in favor of the trustee shall fully effective when the title to the assets is transferred, since the trustee then becomes the owner of such assets.

These assets are kept apart from the trust assets as they are allocated to the fulfillment of the purpose of the deal.

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