Tranche 2 AML for TCSPS What You Need to Know Now

1. TRANCHE 2 AML FOR TCSPS: WHAT YOU NEED TO KNOW NOW

2. The global fight against money laundering has intensified in recent years, and regulatory bodies are expanding their reach to include previously unregulated sectors. One major shift is the introduction of Tranche 2 AML regulations targeting Trust and Company Service Providers (TCSPs). If you're operating in this space, understanding what this means for your business is critical—not just for compliance, but also for reputation and long-term growth. In this guide, we’ll break down what Tranche 2 AML for TCSPS involves, why it matters, and how you can stay compliant without overwhelming your operations. What Is Tranche 2 AML? Tranche 2 AML refers to the second phase of anti-money laundering (AML) regulations being implemented in countries like Australia, New Zealand, and other regions with evolving AML regimes. While Tranche 1 primarily focused on traditional financial institutions like banks and credit unions, Tranche 2 extends the AML obligations to non-financial businesses and professions—including TCSPs, lawyers, accountants, and real estate agents. For TCSPs, this means they are now legally obligated to implement risk-based AML/CTF (Counter-Terrorism Financing) programs, conduct customer due diligence (CDD), and report suspicious activity to regulatory authorities.

3. Why Are TCSPS Targeted in Tranche 2? • Trust and Company Service Providers offer services that are highly susceptible to misuse by criminals for money laundering or hiding illicit assets. These services include: • Creating shell companies • Acting as company directors or nominees • Managing trusts or acting as trustees • Providing registered office addresses • Because these services can mask the true ownership of assets, regulators are closing the loopholes by bringing TCSPs under the AML spotlight through Tranche 2. • Key AML Obligations for TCSPs Under Tranche 2 • Under the new regulatory environment, TCSPs must take specific steps to ensure compliance: • 1. Risk-Based AML/CTF Program • Every TCSP must design and implement a tailored AML/CTF compliance program that aligns with the risks associated with their specific services and client base. • 2. Customer Due Diligence (CDD) • You must verify the identity of all clients, beneficial owners, and any other individuals involved in a transaction. This includes Politically Exposed Persons (PEPs) and Ultimate Beneficial Owners (UBOs).

4. 3. Ongoing Monitoring • Monitoring transactions for suspicious activity is now a requirement. This includes keeping records and being able to flag red flags like unusual transaction sizes, locations, or patterns. • 4. Suspicious Matter Reporting (SMR) • TCSPs must report suspicious activities to the relevant authority—such as AUSTRAC in Australia or FIUs in other jurisdictions—within a prescribed timeframe. • 5. Record-Keeping • You must maintain detailed and secure records of all transactions, risk assessments, and customer identification data for a minimum period (usually 5–7 years, depending on the jurisdiction). • Common Challenges TCSPS Face With Tranche 2 Compliance • Transitioning into a regulated environment presents challenges, especially for smaller TCSPs: • Lack of expertise in AML/CTF compliance • Limited access to affordable AML solutions • Operational disruption from manual processes • Risk of non-compliance penalties • The good news? These challenges are solvable with the right approach and tools.

5. How NameScan Helps TCSPs Stay Compliant • At NameScan, we understand that compliance shouldn’t slow your business down. That’s why we offer a cost-effective and scalable AML compliance solution designed specifically for small to mid-sized firms, including TCSPs. • ✅ Real-Time AML Screening • NameScan’s tools allow you to screen clients against global sanction lists, PEP databases, and adverse media in real-time, reducing your risk exposure. • ✅ Ultimate Beneficial Owner (UBO) Identification • Our UBO verification tools help you uncover complex ownership structures so you’re not in the dark about who you’re really dealing with. • ✅ Ongoing Monitoring • With our continuous monitoring service, you’ll be notified of any changes in your clients' risk status—keeping your business one step ahead. • ✅ Easy Integration • No need to overhaul your tech stack. NameScan solutions are easy to integrate and adapt to your existing processes. • Practical Steps for TCSPs to Comply with Tranche 2 AML • Here's a checklist to help you navigate your AML obligations: • Conduct a Risk Assessment – Understand which services and clients pose the most AML risk. • Develop an AML Program – Build internal policies and procedures tailored to your risk level. • Implement NameScan’s AML Tools – Automate your CDD and screening processes. • Train Your Team – Ensure your staff is educated on red flags and compliance protocols. • Audit Regularly – Perform periodic internal audits to identify and correct compliance gaps.

6. The Future of AML Regulation for TCSPs As regulatory pressure continues to mount, staying ahead of the curve will not only protect you from hefty penalties but also build trust with clients and regulators alike. Tranche 2 is just the beginning—many jurisdictions are already exploring Tranche 3 and beyond. By investing in automated, reliable AML solutions like NameScan, TCSPs can transform compliance from a burden into a competitive advantage. FAQ: Tranche 2 AML for TCSPs What are TCSPs? TCSPs (Trust and Company Service Providers) offer services such as forming companies, acting as trustees, and managing business entities. What is Tranche 2 AML? Tranche 2 AML regulations expand anti-money laundering obligations to non-financial businesses, including TCSPs, lawyers, and accountants. When will Tranche 2 be enforced in Australia? Legislation is expected to be enacted in late 2024 or early 2025. Businesses are encouraged to prepare now. Do all TCSPs need AML compliance programs? Yes. Under Tranche 2, all TCSPs are legally required to implement AML/CTF programs, conduct CDD, and report suspicious activities. How can NameScan help with compliance? NameScan provides AML screening, UBO identification, and ongoing monitoring tools that are easy to implement and cost-effective for TCSPs.

7. Stay Ahead of Compliance with NameScan Navigating Tranche 2 AML for TCSPS doesn’t have to be overwhelming. With the right tools, training, and support, your business can not only meet but exceed regulatory expectations. 👉Ready to simplify AML compliance? Try NameScan today and take the stress out of staying compliant.

8. Contact Us sales@namescan.io https://namescan.io Suite 213, 7 Railway St, Chatswood, New South Wales, Australia