AML/CFT Guide for Trust and Company Service Providers in New Zealand

Part 1

When AML/CFT May Apply

TCSPs can create and operate the legal structures used to own assets. The business should see the whole customer network, not only each entity on its own.

• Forming companies, trusts or other legal persons or arrangements.
• Acting or arranging for a person to act as a director, secretary, partner, trustee or nominee.
• Providing a registered office, business address, correspondence or administrative address.
• Managing client funds, accounts, securities or assets in a captured way.
• Carrying out another listed company, trust or transaction activity.

Part 2

Main Risks in This Sector

These are starting points, not a ready-made risk rating. The business still needs to assess its own customers, services, countries, channels, transactions and technology.

• Layered companies and trusts can hide the real owner or controller.
• Nominee and address services can create a false appearance of substance.
• Cross-border structures can split assets, controllers and records across countries.
• Shelf or dormant entities can be used to create misleading history.
• Separate entity files can hide a larger network controlled by one customer.

Part 3

A Practical Control Plan

1. Step 1

   Confirm scope

   Map formation, nominee, trustee, officer, address and asset services.

2. Step 2

   Build the customer process

   Identify the customer, beneficial owners, controllers and purpose of each structure.

3. Step 3

   Set the risk controls

   Link related entities, addresses, appointees and transactions.

4. Step 4

   Train and connect people

   Set enhanced approval for opaque, cross-border, nominee and higher-risk structures.

5. Step 5

   Test and improve

   Monitor ownership, officers, funding and purpose for the life of the service.

Part 4

Worked Examples

These examples show how the scope and risk questions can be joined. They do not replace the law or the facts of a real matter.

Part 5

Evidence That Should Be Easy to Find

• The section 5, ordinary-course and New Zealand connection analysis.
• The current sector risk assessment and the official sources used.
• A complete register of structures, officers, nominees and addresses.
• Network diagrams linking entities and beneficial owners.
• Enhanced CDD, source and approval records for higher-risk structures.
• Ongoing reviews of ownership, control and service use.
• Customer, beneficial ownership, risk, monitoring and reporting records.
• Training, internal review, independent assurance and remediation records.

Part 6

Common Mistakes

• Reviewing each entity in isolation.
• Accepting nominee instructions without finding the real controller.
• Treating address services as low risk because no money is handled.
• Failing to update enhanced CDD when a trust changes.
• Using documents created by the provider as independent verification.