Trust and company service providers
Published 30 January 2024
What is a TCSP?
A TCSP is a trust or company service provider. TCSPs are “designated persons” or “relevant persons” under Irish and UK anti-money laundering legislation respectively. The term TCSP is defined in legislation.
Ireland in the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (“2010 Act”) (section 24).
United Kingdom in the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended) (section 12)
Please refer to the provisions of the legislation for full details but it includes for example providing the service of forming companies and providing a registered office, business address, correspondence or administrative address or other related services for a body corporate or partnership.
Why are TCSPs relevant to accountants?
In Ireland TCSPs are regulated by one of the Irish Central Bank, the Dept. of Justice or a designated accountancy body. Five prescribed accountancy bodies in Ireland act as competent authorities for their members under the 2010 Act and are responsible in specified circumstances for supervising members which provide TCSP services. The circumstances whereby the Dept of Justice Anti-Money Laundering Compliance Unit (AMLCU) or the relevant accountancy body regulates the TCSP is governed by a memorandum of understanding,
AMLCU-MOU with Accountancy Bodies.
TCSPs regulated by Chartered Accountants Ireland.
In both Ireland and the UK practising firms of Chartered Accountants Ireland which provide accountancy services to the public may also provide TCSP services on an incidental basis pursuant to Chartered Accountants Ireland Public Practice Regulations. If Chartered Accountants Ireland are the AML Supervisor for these firms this will cover the incidental TCSP services. The latest Public Practice Regulations have been issued with effect from 1 January 2024.The key changes from the previous edition include changes in relation to anti-money laundering supervision. For updates on the revised public practice regulations effective January 1 2024.
The Institute has also issued updated Revised Public Practice Regulations Guidance in January 2024.
In Ireland if a Chartered Accountants Ireland member provides TCSP services but does not provide accountancy services then this member does not have a practising certificate so falls outside the Public Practice Regulations. The way the legislation is drafted in Ireland Chartered Accountants Ireland is the AML Supervisor for these entities and they are regulated under money laundering supervision regulations issued by Chartered Accountants Ireland .The latest version of these regulations, Anti-Money Laundering Supervision Regulations – TCSPs and Bookkeepers, Ireland took effect on 1 January 2024. For a news item dated Dec 5, 2023 on the subject which outlines the changes the revised AML Supervision Regulations bring for Institute registered TCSPs and bookkeepers.
The Institute has also issued updated Revised AML Supervision Regulations Guidance in January 2024.
Please also see a news item in January 2024 issued by the Institute drawing members attention to an alert produced by the UK National Economic Crime Centre (NECC) in June 2023 to highlight high risk behaviours and typologies associated with the TCSP sector. The alert includes risk indicators and best practice/guidance to accountancy firms.
In the UK if a Chartered Accountants Ireland member provides TCSP services but does not provide accountancy services, then this member will not have a practising certificate and so falls outside the Public Practice Regulations. In the UK these members must register directly with HMRC for AML Supervision as a TCSP. HMRC hosts a TCSP Register which is currently not public but all Chartered Accountants Ireland accountancy firms which provide TCSP services on an incidental basis must be listed as failure to be listed on this register while providing TCSP services is an offence. For guidance for a trust or company service provider which needs to register for supervision with HMRC.
As with other “designated persons” or “relevant persons” , TCSP entities providing TCSP services have anti-money laundering obligations .Readers should refer to Ireland’s Trust or Company Service Provider Risk Assessment of 2022.The risk assessment emphasises that TCSPs should know the client and know the purpose for which a company it sets up is to be used including whether there a business rationale .See Table 8 of the risk assessment which sets out TCSPs’ legal obligations under the 2010 Act . Readers might also find of interest the case studies at the back of the 2022 risk assessment.
In the UK the Government has issued guidance “Trust or company service provider guidance for money laundering supervision”. The guidance is written for businesses that HMRC supervises and it states that it may be referenced by all supervised TCSPs. The guidance helps trust or company service providers meet their requirements for money laundering supervision, including customer due diligence, record keeping and reporting suspicious activity.Please also click for HMRC guidance on its pages “Help and support for money laundering supervision” where there are a series of webinars on money laundering supervision containing information for all businesses and sectors including Accountancy Service Providers and Trust or company service providers registered with HMRC .
Readers may find information and statistics in the Institute Professional Standards Department‘s Trust and Company Service Providers Thematic Review in April 2023 of interest. The document summarises the responses to a detailed questionnaire issued to a sample of firms based in Northern Ireland. Responses include a finding that the majority of firms which responded only provide TCSP services such as company formation / registered office and only provide such services to existing clients alongside other ancillary accountancy services (e. g. statutory audit, tax and accounts preparation).
Other information on TCSPs
Please see the OPBAS Multi-PBS (Professional Body Supervisor) review and project on TCSP risk of March 2023. OPBAS states that the project focuses on supporting a system-wide approach to tackling the abuse and exploitation of TCSPs by criminals.
In 2019 FATF issued guidance for a risk-based approach for Trust and Company Service Providers. The guidance highlights that TCSPs should design their policies and procedures so that the level of initial and ongoing client due diligence measures addresses the money laundering and terrorist financing risks they are exposed to. The guidance has a section for supervisors of the TCSP sector and it also highlights the importance of supervision of beneficial ownership requirements and nominee arrangements. For more information on beneficial ownership in the anti-money laundering context please click here to go to the Institute’s webpage on beneficial ownership.
These pages are provided as resources and information only and nothing in these pages purports to provide professional or legal advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the pages. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of these pages, we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained in these pages.
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