Trust and company service providers, commonly referred to as TCSPs, occupy a high-risk position in Australia’s expanded AML\/CTF framework. They are the professionals who form companies, establish trusts, provide registered office addresses, appoint nominee directors and shareholders, and manage legal arrangements on behalf of clients. These are precisely the services that financial crime investigators have identified, time and again, as the mechanisms through which illicit funds are layered into the legitimate economy.<\/p>\n
From 1 July 2026, TCSPs providing designated services with a geographical link to Australia are required to comply with the AML\/CTF Act. This is not a new obligation for financial institutions. It is a new obligation for the professional services sector. For many TCSPs, it is the first time they have been directly regulated for AML\/CTF purposes.<\/p>\n
NameScan has been providing AML screening solutions to compliance teams across 27,000 businesses globally and supports TCSPs in meeting their customer due diligence and screening obligations. This guide explains which TCSP services are in scope, what your obligations are, and the practical steps to get ready.<\/p>\n
The term TCSP covers a broad range of service providers whose common thread is facilitating the creation and management of legal entities and arrangements. Under Australia’s AML\/CTF Act, you are a TCSP and therefore potentially a reporting entity if you provide any of the following services as a business:<\/p>\n
Not every service will apply to every TCSP. The test is the designated service, not the professional title. A registered agent who incorporates companies but does not provide nominee directors is a reporting entity only in respect of the company formation service.<\/p>\n
Note also that lawyers and accountants who provide TCSP-type services are subject to the same obligations through the professional services provisions of the AML\/CTF Act, not the TCSP provisions, but the practical compliance requirements are largely the same.<\/p>\n
TCSPs are identified by the Financial Action Task Force (FATF) as one of the highest-risk professional groups for money laundering. FATF Recommendation 22 specifically identifies trust and company service providers alongside legal professionals and accountants as sectors requiring AML\/CTF regulation because of their ability to create legal opacity.<\/p>\n
Australia’s own national risk assessments have consistently flagged the legal and corporate services sector as a significant money laundering vulnerability. The AUSTRAC CEO has noted that newly regulated entities, including TCSPs, should not expect a soft approach to enforcement simply because they are new to the regime.<\/p>\n
The risk concentrates in several specific ways: TCSPs can create legal entities that separate ownership from control, establish nominee arrangements that obscure beneficial ownership, and set up complex trust structures across multiple jurisdictions that are extremely difficult for law enforcement to unwind.<\/p>\n
If you provide one or more designated TCSP services, you must enrol with AUSTRAC. Enrolment opened on 31 March 2026 and the deadline for Tranche 2 entities is 29 July 2026. You cannot provide a designated service after 1 July 2026 without being enrolled.<\/p>\n
You are required to have a written, two-part AML\/CTF programme in place. Part A covers your ML\/TF risk assessment, governance, staff training, and independent review. Part B covers your customer due diligence procedures, including identity verification, beneficial ownership identification, PEP and sanctions screening, and ongoing monitoring.<\/p>\n
Given the inherently high-risk nature of TCSP services, AUSTRAC will expect your risk assessment in Part A to reflect a thorough understanding of the ML\/TF risks specific to your service mix, not a generic low-risk assessment that ignores the opacity your services can create.<\/p>\n
CDD for TCSPs is more complex than for many other Tranche 2 sectors because the client often intends to use your service to create or manage a structure on behalf of a third party, the ultimate beneficial owner of the company or trust you are facilitating. This means:<\/p>\n
Where the beneficial owner cannot be identified (because of complex layering, offshore components, or a customer who refuses to disclose), that is itself a significant red flag, and you should consider whether the service can be provided at all.<\/p>\n
All CDD processes for TCSPs must include PEP screening and sanctions screening for both the customer and the beneficial owner. Given that TCSPs frequently work with clients establishing structures to manage significant assets, the probability of encountering PEP-connected clients is higher than in many other sectors. Foreign PEPs require mandatory enhanced due diligence. Sanctioned individuals or entities cannot be onboarded, and any existing relationship with a sanctioned party must be reviewed immediately.<\/p>\n
All CDD documentation, screening results, beneficial ownership records, and AML\/CTF programme materials must be retained for seven years. For TCSPs, this includes the records of the structure you helped create: the company formation documents, trust deeds, nominee arrangements, and so on, as well as the compliance documentation associated with the customer engagement.<\/p>\n
If you form a suspicion that a transaction may be connected to money laundering, terrorism financing, or another serious offence, you are required to file an SMR with AUSTRAC. For TCSPs, the triggers are most likely to arise when a customer’s instructions are inconsistent with the stated purpose of the structure, when beneficial ownership cannot be established despite reasonable inquiry, or when the structure appears to have no legitimate commercial rationale.<\/p>\n
With the 1 July 2026 deadline in effect, TCSPs need to move quickly. The priority steps are:<\/p>\n
For trust and company service providers, Tranche 2 represents a fundamental change in how you operate. The services you provide (company formation, nominee arrangements, trust administration) are precisely the services most commonly exploited in financial crime. AUSTRAC knows this, and the expectation is that your compliance programme reflects a thorough understanding of those risks.<\/p>\n
Most of the practical compliance work (identity verification, PEP and sanctions screening, beneficial ownership documentation) can be handled with modern, purpose-built tools that are accessible to businesses of all sizes. The investment in getting your programme right is small compared to the regulatory risk of getting it wrong.<\/p>\n
A trust and company service provider (TCSP) is a business or individual that provides services such as company formation, registered office addresses, nominee directorships or shareholdings, trustee services, or the management of legal arrangements on behalf of clients. Under Australia’s AML\/CTF Act, TCSPs providing one or more of these designated services with a geographical link to Australia are required to comply with AML\/CTF obligations, including enrolment with AUSTRAC, an AML\/CTF programme, customer due diligence, and suspicious matter reporting, from 1 July 2026.<\/p>\n
TCSPs can create and manage legal structures (companies, trusts, nominee arrangements) that separate the apparent ownership and control of assets from their true beneficial owner. This opacity is what money launderers seek when layering funds. FATF Recommendation 22 specifically requires that countries regulate TCSPs under their AML\/CTF framework, recognising them as a consistently exploited gateway for financial crime. AUSTRAC’s own risk assessments identify the corporate and trust services sector as a significant money laundering vulnerability in Australia.<\/p>\n
Yes. Under AUSTRAC’s AML\/CTF Rules, CDD for TCSP services must include identifying and verifying the ultimate beneficial owner (UBO) of the structure being created or managed. If you are forming a company on behalf of a client, you need to identify who will ultimately own and control that company, not just verify the identity of the person instructing you. If a client refuses to disclose the beneficial owner, or if beneficial ownership cannot be established through reasonable inquiry, you should not proceed with the service and should consider whether an SMR is warranted.<\/p>\n
CDD for TCSP clients must include sanctions screening (checking the customer and beneficial owner against OFAC, UN, EU, DFAT, and other relevant sanctions lists), PEP screening (checking whether the customer or beneficial owner is a politically exposed person), and adverse media screening (checking for negative news linked to financial crime, fraud, or corruption). Where a PEP is identified, particularly a foreign PEP, enhanced due diligence is mandatory. All screening results must be recorded and retained for seven years.<\/p>\n
Where you cannot identify the ultimate beneficial owner of a structure despite reasonable inquiry, that is a significant red flag. You should not proceed with the service if you cannot satisfy your CDD obligations. Depending on the circumstances, you may also be required to file a Suspicious Matter Report (SMR) with AUSTRAC. AUSTRAC has been clear that TCSPs cannot simply proceed with a transaction and note in their records that beneficial ownership was unclear. The inability to identify beneficial ownership is itself a risk indicator that requires a documented response.<\/p>\n