Cash-intensive businesses may move cash across borders as part of their business model. Cross-border movement of licit cash can be legal, subject to compliance with reporting and other relevant legal and regulatory requirements. However, criminals may also seek to move cash across borders; according to FATF, the physical transportation of cash across an international border is “one of the oldest and most basic forms of money laundering” and is still widely used today.⁴ The criminal economy tends to be cash-based with illicit proceeds of crime moving quickly and anonymously, including across borders. Illicit actors often choose to remove their illicit assets from a bank account in order to obscure the audit trail by transporting it to another country where they can spend the cash on goods or services or reintroduce the cash into the financial system. Illicit actors who generate cash proceeds also seek to move their profits to jurisdictions that will allow the placement of cash into the legal economy without detection. Their selection of a jurisdiction can be driven by the predominant use of cash in that jurisdiction, the weaker AML/CFT controls of a jurisdiction’s financial system including few or no restrictions on cash payments, or a jurisdiction’s reputation as a banking secrecy haven. Illicit actors can exploit the high volume of passenger, cargo, and mail movements into and out of jurisdictions to move cash without attracting the attention of authorities.

Cash-intensive businesses may utilize cash couriers to move cash across borders. Cash couriers are natural persons who physically transport currency and bearer negotiable instruments on their person or accompanying luggage from one jurisdiction to another. Couriers may be directly involved in the underlying crime or may be third parties recruited specifically to move money to another jurisdiction. Mechanisms to conceal the cash include within pieces of clothing on the physical persons (such as a money belt), hidden within luggage, or even concealed internally. Cash couriers may use air, sea, or rail transport to cross an international border and typically use high denomination banknotes as part of their transportation, which decreases the size and bulk of low denomination banknotes.

Specifically, cross-border movements of cash across an international border are used to:

It is not illegal to move cash into or out of the UAE. However, natural or legal persons must declare upon entering or leaving the UAE any currencies, bearer negotiable instruments, precious metals and stones above the threshold of AED 60,000. The relevant extract of the Regulation on the Declaration of Currencies, Bearer Negotiable Instruments, and Precious Metals and Stones in Possession of Travelers Entering or Leaving the UAE (issued in the Official Gazette No 703 dated 31/05/2021) is in the box below.

Understanding whether customers have made any such declarations, in accordance with the Regulation should form part of any due diligence by the LFIs where required. As part of due diligence, LFIs may require additional information on the customer or the transaction, including the source of funds and relevant documentation.

Potential Risk Indicators:

⁴ FATF “Money Laundering through the Physical Transportation of Cash” (October 2015), available at: https://www.fatf- gafi.org/media/fatf/documents/reports/money-laundering-through-transportation-cash.pdf

Cash-intensive businesses can be expected to make cash deposits, which is legal and a natural fit with their business model. Illicit actors, however, will seek ways to place their illicit cash into the financial system. Illicit actors involved in cash generating crimes frequently need to use a significant portion of the cash they have acquired to pay for the illicit goods they have sold, to purchase additional goods, and to pay the various expenses incurred in acquiring or transporting the goods. As part of the money laundering process, individuals seek to use the proceeds of crimes by disguising the origin of the funds as legitimate economic activities. Terrorists also seek to finance, often through small amounts of cash, terrorist activities without traceability. LFIs should therefore be aware of cash deposits placed into the banking system that involve high-risk customers and/or geographical areas, third parties without a relationship to the customer, and transactions that lack an apparent business purpose. LFIs should, as the case may be, undertake CDD measures on the third party cash depositors transacting in any accounts above the threshold specified in Article 6 of the AML-CFT Decision. LFIs should also obtain appropriate information regarding the source of cash deposited in a customer’s account as well as mandate the use of Emirates ID for cash deposits in ATMs.

Cash-intensive businesses may include currency exchanges as legitimate providers of services. Currency exchanges, however, can also be an attractive vehicle that illicit actors seek to exploit to enter the financial system and transfer their funds. According to the FATF, the simplicity and certainty of currency exchanges transactions and the anonymity and portability of cash make them attractive to money laundering and the financing of terrorism and illegal organisations.⁵ Once the money has been exchanged, it is difficult to trace its origin. There are two different ways to perform a currency exchange: (1) the use of cash to exchange and transfer the funds; or (2) the use of the internet to perform the currency exchange and transfer the funds to a bank account.

⁵ FATF “Money Laundering through Money Remittance and Currency Exchange Providers” (June 2010), available at: https://www.fatf-gafi.org/media/fatf/ML%20through%20Remittance%20and%20Currency%20Exchange%20Providers.pdf