Cash-intensive businesses are businesses that experience a high volume of cash flows. However, because cash-based transactions are inherently difficult to trace, as discussed above, cash-intensive businesses may potentially be used as vehicles for money laundering and the financing of terrorism and illegal organisations. Businesses that generate a large volume of cash revenue may be susceptible to abuse by illicit actors that integrate the proceeds of crime into the banking system under the guise of legitimate business. In particular, they may exploit cash-intensive businesses for money laundering and the financing of terrorism and illegal organisations by using cash-intensive business to:

Cash-intensive businesses span across various industry sectors. Most of these businesses are operating a legitimate business; however, some aspects of these businesses may be vulnerable to money laundering or the financing of terrorism and illegal organisations. Examples of cash-intensive businesses include but are not limited to the following:

In addition, please consult the CBUAE’s Guidance for Licensed Financial Institutions providing services to the Real Estate and the Precious Metals and Stones sector³ for further information.

LFIs may expand on the above by considering additional factors when identifying cash-intensive businesses in their customer base. For example LFIs can define cash-intensive businesses based on specific criteria, such as a proportion or more of the business’ revenue is in cash or the business has a monthly revenue in cash above a certain threshold. In either scenario, the definition of cash-intensive business should be determined by the LFI, justified by a sound methodology that considers various factors including risk and characteristics, documented in the LFI’s policies and procedures, and approved by the LFI’s senior management.

The LFI should monitor whether the cash-intensive business appears to generate unusual transactions compared to the business’ expected activity and profile, and with other similar cash-intensive businesses. For example, a small business making significantly larger amounts of cash deposits than other businesses of a similar size in the same industry should be reviewed for potential money laundering activity. The extent of the vulnerability presented by cash-intensive businesses may be particularly severe due to large volumes of cash transactions, limited record keeping, and high customer turnover. LFIs should therefore understand the nature and purpose of the business relationship and expected activity of the customer in order to identify types of transactions that appear to be unusual, potentially suspicious, and/or inconsistent with the customer’s profile and stated purpose of the account.

The following sections examine common features of cash-intensive businesses that impact risk. LFIs should consider the specific risks posed by these features to determine whether the customer is considered as high-risk and should be subject to enhanced due diligence (“EDD”) measures. LFIs should incorporate this assessment into their AML/CFT program and update their policies, procedures, and processes with the aim to detect illicit activity and manage illicit financing risks.

³ Available at https://www.centralbank.ae/en/cbuae-amlcft