As regulators increase their scrutiny of TCSPs not only does this raise the risk of punitive fines and reputational damage to the business, but directors and senior managers can be held personally liable for prosecution
Regulators have long recognised that the nature of the work of TCSPs makes them extremely susceptible to money laundering.
As the rulebook continues to evolve it has ramped up the pressure on TSCPs to improve their compliance processes or risk invoking regulatory action such as punitive fines, further scrutiny, and long-term reputational damage.
And the stakes are even higher for the directors and senior managers of TCSPs. They can be held personally liable for prosecution and penalties, which in the UK carries a maximum prison sentence of two years for breaches of AML law.
Identifying your AML vulnerabilities is a crucial step to monitoring ongoing risk
Criminals are using increasingly sophisticated methods to flush their money through legitimate service providers and TCSPs remain a key target.
Common money laundering tactics through TCSPs include: using familiar, pre-existing entities for transactions to seem less risky; flushing larger proceeds in jurisdictions with lesser transparency rules; using family relationships to disguise the asset controller and beneficiaries of a trust. And these a just a small selection of the dangers that TCSPs face.
As a result, TCSPs must now fully understand where their vulnerabilities lie in order to identify and report suspicious activity through enhanced onboarding, due diligence, and screening processes.
To help you identify any weaknesses in your overall compliance framework, we have published an in-depth report on the AML vulnerabilities specifically faced by TCSPs.
In this spotlight report, we cover:
- Why money launderers target TCSPs
- AML regulation in the EU and beyond
- TCSPs’ legal duties
- How automation can provide risk solutions
- Download your free copy of this valuable compliance analysis here.
How RiskScreen can help you to overcome your AML challenges
Recognising the AML vulnerabilities your organisation faces, is just the first step to protecting you from any potential risk.
The mounting pressures mean that it is now crucial that TCSPs take a far more proactive, risk-based approach to combatting money laundering. Yet many TCSPs are still under-resourced and still relying on outdated manual money-laundering processes that are no longer fit for purpose.
This is even though evolving technologies now exist that offer flexible, scalable, and auditable solutions that deliver a truly effective and efficient AML process in the face of an ever-changing regulatory environment.
The RiskScreen AML platform is one of the world’s leading solutions and has been designed specifically to provide a complete end-to-end solution to meet both existing and future challenges.
It offers a range of modules that cover key areas such as screening, onboarding, in-life monitoring, and adverse media. With flexibility in mind, you can choose individual modules to cover specific areas as your business requires or install the complete package for a fully integrated solution.
With RiskScreen by your side, you can rest assured that your anti-money laundering (AML) and know your customer (KYC) processes will be fundamentally transformed, with full scalability to future-proof your compliance functions.
RiskScreen is a TrustQuay ecosystem partner.