Trustee companies and corporate trustees occupy a double position under AML/CTF: they provide trustee services that can be designated services, and they are entity customers whose own controllers must be identified when they receive services. The two questions are different. This guide explains how to test trustee services under table 6, how control analysis applies to the trustee, and what CDD and monitoring the roles require.
Test the trustee service
Item 7 covers acting as a trustee, partner, director or secretary for another person in the circumstances the item describes, or arranging or preparing for another person to do so. The service is tested by the role, the nominator's control and the steps that directly advance the arrangement. Not every trust administration role is item 7; ordinary administrative or procedural agency work is not captured.
A trustee company should map each service line - acting trustee, arranging trustees, administering trusts, custody or settlement roles - and record which are designated services and which are routine administration.
Identify the customer layers
The trust and the trustee are separate layers. For a corporate trustee, the company itself is an entity customer, so the analysis must reach the individuals who control it. For the trust, the analysis reaches trustees, beneficiaries and the purpose of the arrangement.
- The nominator and the persons on whose behalf the service is received
- The beneficiaries or each beneficiary class for trust customers
- The settlor where relevant to the relationship
- The beneficial owners and controllers of any corporate trustee
- The directors and officers who act for the trustee company
CDD, monitoring and reporting
Trustee work is a control role: the trustee company sees the deed, the distributions and the funding. That visibility is the monitoring asset, provided the file connects the activity to the customer and the risk assessment.
- Complete initial CDD before providing a designated service
- Screen customers, owners and controllers for PEPs, sanctions and adverse media
- Review the trust's activity against its deed and purpose
- Escalate distributions, funding or amendments that are inconsistent with the deed
- Lodge SMRs within the deadline and protect SMR-related information
Governance and records
A trustee company's AML program should reflect its dual role: as a reporting entity providing services, and as a business whose own controllers and customers must be known. The records should make both visible.
- Document which officers decide, approve and report
- Retain trust files, CDD, ownership mapping and monitoring records
- Train staff on the difference between the trust and the trustee
- Review the service map when the company takes on new trustee roles
Official sources
Confirm the current rules against these primary sources.
Questions
Is every trustee service a designated service?
No. Item 7 applies where the statutory elements are met, including the nominator's control over fulfilment of the role. Ordinary administrative or procedural work is not automatically captured.
Who are the customers of a trustee service?
The nominator, the persons on whose behalf the service is received, and the beneficiaries (or classes) for the trust, plus the owners and controllers of any corporate trustee.
Does a corporate trustee need its own CDD?
Yes. A corporate trustee is an entity customer; the rules require identification of the entity and its beneficial owners and controllers where applicable.
What is the most important control for a trustee company?
Knowing the trust's purpose and activity well enough to notice inconsistency, and recording it. The deed is the baseline; departures from it are the risk signal.
General information for Australian professionals, not legal advice. It does not replace the AML/CTF Act, the Rules or AUSTRAC guidance. See our editorial standards.
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