• Trust and Company Service Providers

    Some services provided by trust and company service providers are attractive to criminals wanting to launder the proceeds of crime and to finance terrorism

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Trust and Company Service Providers

What are the ML/TF Risks?

Trust and Company Service Providers (TCSPs) can take different forms, but generally assist in the creation, operation and management of corporate and trust structures.

The services offered by TCSPs operate as a gateway to property and financial markets, financial institutions and other regulated professionals. These can be misused by criminals to disguise beneficial ownership, conceal the origins and purposes of financial transactions, facilitate tax evasion and, ultimately, launder the proceeds of crime.

Where complex structures are established, it can also create distance between criminal entities and their illicit wealth.

The Money Laundering and Terrorist Financing (ML/TF) risks associated with TCSPs include:

  • Criminals may seek out trust and company service providers as gatekeepers to the financial system to give the impression of respectability and legitimacy;
  • Criminals may seek to conduct their financial activity through a trust and company service provider to disguise their criminal involvement;
  • Criminals may seek the assistance of trust and company service providers to establish companies or trusts which they use to obscure who really owns of controls the funds and assets;
  • Use of services provided by trust and company service providers to evade tax and exploit known tax shelters; and
  • Creating distance between criminal entities and their illicit income or wealth by using complex business and corporate structures to avoid detection and confiscation of assets, and hindering law enforcement investigations.

TCSPs must ensure the organisation conducts a comprehensive ML/TF risk assessment to identify, assess, mitigate and manage ML/TF risk exposures as a critical first step in complying with AML/CFT laws.

What are the AML/CFT obligations?

In developing responses to obligations under AML/CFT laws and regulations the following steps must be undertaken:

  • Conduct a Money Laundering and Terrorism Financing Risk Assessment;
  • Develop an AML Program that is proportionate to ML/TF Risks;
  • Establish effective Board and Senior Management oversight of the AML/CFT Program;
  • Appoint an AML Compliance Officer;
  • Establish a Customer Due Diligence (CDD) Program including collection and verification of know your customer (KYC) information including Enhanced and Ongoing CDD controls;
  • Implement a ML/TF Risk Awareness Training Program for staff;
  • Implement a monitoring program to identify unusual and possibly suspicious customer activity, transactions and behaviour;
  • Establish a process to report suspicions and other activity specified by AML/CFT law and regulation;
  • Establish Record-keeping controls; and
  • Maintain the ML/TF Risk Assessment and the AML Program as the business and risks change.

How can AML Accelerate help?

AML Accelerate, drawing on unparalleled expertise and real-world experience, has developed an AML/CFT Program Manual for the trust and company service industry.

Our solutions deliver all the foundational AML/CFT materials including a ML/TF Risk Assessment, an AML/CFT Program, CDD Standards, and an AML Operating Manual, which you can tailor to your specific needs, ensuring your AML/CFT controls are commensurate with your business.

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