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GUIDANCE FOR A RISK-BASED APPROACH FOR TRUST AND COMPANY SERVICE PROVIDES (TSCPS)
c) The nature of the services sought. For example, lower risks may exist where a
PEP is not the client but a director of a client that is a public listed company or
regulated entity and the client is purchasing property for adequate
consideration.
Ongoing monitoring of clients and specified activities (R.10 and 22)
94. TCSPs are not expected to scrutinise every transaction carried out by a trust,
company or other legal entity to whom the TCSP provides services. Some services are
provided only on a one-off basis, without a continuing relationship with the trust,
company or other legal entity and without the TCSP having access to the books and
records of the trust, company or other legal entity and/or bank records. However,
many of the professional services provided by TCSPs enable them to identify
suspicious activity or transactions carried out using trust, companies or other legal
entities. For example, their direct knowledge of, and access, to the records and
management processes and operations of such structures as well as through close
working relationships with trustees, settlors, managers and beneficial owners may
help TCSPs make a determination in this regard. The continued administration and
management of the legal persons and arrangements (e.g. account reporting, asset
disbursements and corporate filings) would also enable the relevant TCSPs to develop
a better understanding of the activities of their clients.
95. TCSPs need to be alert for events or situations which are indicative of a reason
to be suspicious of ML/TF, employing their professional experience and judgement in
the formulation of suspicions where appropriate. An advantage in carrying out this
function is the professional scepticism which is a defining characteristic of many
professional TCSPs’ functions and relationships.
96. Ongoing monitoring of the business relationship should be carried out on a
risk related basis, to ensure that the trustees, settlors, beneficial owners and natural
persons exercising effective control (as described in Annex 1) are aware of any
changes in the client’s identity and risk profile established on acceptance. This
requires an appropriate level of scrutiny of activity during the relationship, including
enquiry into source of funds and wealth where necessary, to judge consistency with
expected behaviour based on CDD information. As discussed below, ongoing
monitoring may also give rise to filing a STR.
97. The TCSP should also consider reviewing CDD on an engagement/assignment
basis for each trust, company or other legal entity with respect to which the TCSP
provides ongoing services. Well-known, reputable, long-standing trustees, settlors,
beneficial owners or other natural persons exercising effective control (as described
in Annex 1) may suddenly request a new type of service that is not in line with the
previous relationship with the TCSP. Such an assignment may suggest a greater level
of risk.
98. TCSPs should not conduct investigations into suspected ML/TF on their own
but instead file a STR or if the behaviour is egregious they should contact the FIU, law
enforcement or supervisors, as appropriate, for guidance. Within the scope of
engagement, a TCSP should be mindful of the prohibition on “tipping off” the
individual concerned where a suspicion has been formed. Carrying out additional
investigations, which are not within the scope of the engagement should also be
considered against the risk alerting a money launderer.