Anti Money Laundering Service Provider: Handling Cash Intensive Businesses to Prevent Money Laundering

While most cash-intensive businesses conduct legitimate businesses, there are various factors that make these businesses open to money laundering and terrorist financing. According to anti money laundering service provider, internal markets, cross-border transactions, and business transactions that are cash intensive may give room for money laundering. Such businesses enable the money laundering perpetrators to:

• Launder huge sums of money from criminal activities and claim that the money comes from legitimate business activities.

• Launder huge amounts of cash sourced from criminal activities and justify the origin based on fictitious economic activities of goods and services.

• Financing terrorist activities through small amounts of money without traceability.

How to identify a Cash Intensive Business

The Federal Financial Institutions Examination Council requires all banks to establish policies, processes, and procedures that identify high-risk businesses. You can also use an anti-money laundering service provider to determine whether you are high risk or not. A bank must perform due diligence on account opening and, after some time, throughout the relationship. The bank must also know the customers' operations, the purpose of the account, expected transaction volume, services and products used, and the geographic location.

Red Flags in Cash Intensive Businesses

The reporting and regulatory agencies pay extra attention to some products and services that pose a huge risk of money laundering during a cash-intensive business audit. These areas include;

• Customers or businesses that handle denominations, amounts, and currencies that do not fit their profile or their commercial activities.

• Lack of relation or understanding between the amounts deposited and the amounts coming in through other payment methods without commercial or historical explanation of such money.

• Check deposits or other money transfer transactions from businesses of the same nature located nearby and without explanation.

Money laundering is a serious crime. This is because the money being laundered is often associated with criminal activities such as drug dealing, arms selling, and human trafficking. Protect your cash-intensive business by engaging an anti-money laundering service provider.