TCSP services have been addressed in updated guidance from HM Revenue & Customs and a publication by the Office for Professional Body AML Supervision (OPBAS) setting out their findings from a review of Professional Body Supervisors’ (PBS) approach to TCSP risks.
OBPAS reported that most PBSs have assessed the TCSP risk within their own supervised populations as being relatively low and that this is contrary to the National Risk Assessment 2020 (NRA) which categorised TCSPs as higher risk. This may be surprising to our readers. While the report refers to the Panama and Pandora papers, which showed that TCSPs can be abused for illicit purposes, our findings on audit of firms under regulation 21 of The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) are consistent with an assessment of risk as low in practice.
The definition of TCSP in regulation 12 of the MLR 2017 was extended by The Money Laundering and Terrorist Financing (Amendment) (No. 2) Regulations 2022 to include the formation of all forms of business arrangement, not just companies and other legal persons. Discrepancy checks with the Trust Registration Service are required as part of ongoing monitoring.
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