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What are the risk factors? by Milena Radoman

Estate agents, bankers, insurers, MFOs, jewellers and casinos: all professionals subject to the anti-
money laundering laws are required to know the risks linked to their activity and their customers.

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1- Products or services that are risky by Assessment.” Finally, customer behaviour can 4 – Strange distribution channels
nature also raise questions: “Are there clients who “When the relationship with clients is
“Certain products or services offered by are reluctant to share information about their established via intermediaries or business
an establishment may present a higher identity or the origin of their wealth? Are they providers, the risk linked to money laundering
risk,” stresses the AMSF (Monaco's financial exhibiting suspicious behaviour? Are customers and terrorism financing (ML/TF) is increased
security authority), according to which the requesting products or services that do not because this can harm the relationship that
risk of each product or service “must be seem logical or economically appropriate?” the establishment has with its clients. We
assessed according to” in particular the level note that the use of intermediaries, who are
of transparency or opacity shown and its 3 – Transactions' circumstances raise not subject to the provisions of amended
use for money laundering purposes. “The questions Law 1.362 or equivalent provisions, is an
nominee shareholder services offered by a The payment methods used can raise the risk increased risk factor for ML/FT. When a
trust and company service provider will thus of the transaction up a notch. “For example, relationship with a customer is established
be considered to be at risk because they can cash payments are an inherently risky payment remotely (by telephone or email), the risk
complicate the identification of beneficial method. On the contrary, payments by bank linked to ML/FT is increased, in particular
owners. Other examples: antiques put up for card or transfer present a lower level of risk due to the greater risk of identity theft,”
sale by an art dealer could be considered a due to the traceability they allow,” observes indicates the AMSF. For example: “When
risky product since it is difficult to trace their the AMSF. Another signal: the amount, renting pleasure craft, certain regulated
provenance and/or the origin of the funds volume and frequency of transactions. “The professionals may offer services or
used to acquire them; or for a goods trader, greater the amounts, volume and frequency operations that may involve the handling
the sale of luxury watches could be considered of transactions, the higher the risk to which of cash: this is the case, for example, for
a risky business due to the high unit value of the institution is exposed.” Likewise, the on-board cash register operations, which
certain watches and the known existence of complexity of transactions must be taken may sometimes reach significant amounts.
criminal organisations active in the sale of into account. “Transactions involving several Indeed, cash payments or cash handling
this type of product.” counterparties or several countries will be constitute, by nature, a risky means of
considered to be more risky than simple payment. On the contrary, payments by bank
2 - At-risk clients transactions (domestic transactions or regular card or transfer present a lower level of risk
In order to identify the risks associated with their payments, for example).” due to the traceability they allow.”
client portfolio, including the beneficial owners
of their client entities, professionals must take
into account the nature of the clientèle, the Due diligence obligations with regard to For the gambling sector
sector of activity, as well as their reputation clients and operations • When winnings are collected
(are they subject to international sanctions or For all professionals • When bets are being placed
adverse information from external sources? • When there is suspicion of ML/FT • When they conclude a transaction for an
Are they involved in criminal cases or on- • When they enter into a business amount greater than or equal to €2,000
going legal proceedings?). Politically Exposed relationship, that is to say a relationship (whether the transaction is carried out
Persons (PEPs who have exercised, at least that is supposed to be long-term in one or more operations which appear
over the past year, an important public function) • When they carry out a transfer of funds linked)
constitute, by nature, higher risk clients, given or a transaction for an amount greater For property traders
their position of influence and their increased than or equal to €15,000 (whether carried • When they execute a cash transaction
exposure to the risk of corruption,” says the out in a single operation or in several for an amount greater than or equal
AMSF, according to which professionals must operations between which there appears to €10,000 (whether the transaction is
be particularly vigilant in certain sectors. “In to be a link) executed in a single operation or several
the Yachting/chartering sector, one in eight operations that appear to be linked)
clients is a PEP according to the National Risk

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