UK’s HM Revenue and Customs (HMRC) has issued a guidance document after for Trust and Company Service Providers (TCSP). The National Risk Assessment 2017 flagged TCSP as a high-risk profession, particularly when linked to financial, legal or accountancy services. It is, therefore, important that businesses understand the risks presented by their customers and install necessary controls to address these risks. According to HMRC, a risk assessment must focus on the nature of the services that the business provides and how these services could be misused for ML/TF.
A TCSP must know who their customers and beneficial owners are to employ the right amount of due diligence. Meanwhile, company formation agents should be wary of UK-based clients who are seeking several companies at the same time. Such companies may be misused to facilitate illegal movement of funds across jurisdictions. Further, those providing director services must know the beneficial owner and the nature of the business. This is especially important if a client is requesting such services for suspiciously long periods of time.
Company secretarial service providers catering to a non-UK-based entity must ensure that they are competent in the area. This includes knowing the risks associated with appointing a Company Secretary who is not located locally. Similarly, if a provider offers virtual office services to businesses belonging to non-UK residents, it must consider the risks and due diligence measures associated with this unique situation. This is particularly important because those engaging in investment frauds often misuse virtual office addresses.