ECSH52125 | Business sectors supervised by HMRC: trust or company service providers: general risks in the Trust or Company Service Providers (TCSP) sector

Within the services provided by trust or company service providers (TCSPs) to their clients, there is a risk of exploitation by criminals in order to launder illicit monies and conceal assets. Common risks throughout the sector may present as, but are not limited to, the following.

• Criminals may purchase legitimate businesses that can then be used to launder illicit funds. They can use these as a cover for other illicit activity.

• The TCSP’s client operates in a supervised sector and is not registered for supervision.

• The service requested or the customer’s business does not appear to be normal business practice, have a valid commercial reason or make any economic sense.

• Customer or service is from or linked to a non-UK (overseas) jurisdiction (see Risk Assessment of Trust or Company Service Providers for more information on which jurisdictins pose a risk to TCSPs)

• The business provides services to an intermediary who is acting on behalf of a client and is involved in a supply chain.

• TCSP services are requested for an entity that appears to be dormant.

• The business is not registered for submitting suspicious activity reports (SARs).

A supply chain is created when a relevant service is provided to an end user via an intermediary. TCSPs can provide a wide range of services, and a customer may utilise a number of TCSPs for different services to conceal activity and ensure only a limited picture of their activity is presented to any one TCSP.

Supply chains can compound the risks presented by individuals and intermediaries involved with the provision of TCSP services, by placing distance between the TCSP and the end user of the service which could be used for the purposes of providing anonymity. Where supply chains involve intermediaries or end users who are based outside of the UK, the risk is further increased; this combines the risk of the service being provided overseas with risk inherent to supply chains.

Further information regarding risks can be found within:

• The National Risk Assessment 2025

• Risk Assessment of Trust or Company Service Providers

• HMRC’s Money Laundering Supervision Guidance for TCSPs

• FATF Guidance for a Risk-Based Approach for Trust or Company Service Providers

• European Commission Supranational Risk Assessment of Money Laundering and Terrorist Financing

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)