Designated Non-Financial Businesses and Professions

Designated Non-Financial Businesses and Professions (DNFBPs) are businesses and professionals that are not part of the financial sector but can still be involved in activities related to money laundering and terrorism financing. These entities must follow AML (Anti-Money Laundering) regulations to prevent illegal financial activities.

Examples of DNFBPs include:

• Real Estate Agents: Involved in buying and selling properties.
• Lawyers and Notaries: Legal professionals who manage financial transactions.
• Accountants and Auditors: Help manage business finances.
• Dealers in Precious Metals and Stones: Deal with high-value items that could be used to launder money.
• Casinos: Handle large amounts of cash, which can be used for illegal activities.

These businesses must follow AML rules like checking the identity of their customers (Customer Due Diligence or CDD), keeping transaction records, and reporting Suspicious Activity Reports (SARs) to authorities when they notice anything unusual.

Example:

PropertyWorld Ltd., a real estate agency, has a customer named Mr. Jamal who wants to buy a luxury apartment worth $5 million. Mr. Jamal provides documents to show he has enough money for the purchase.

• When the compliance officer at PropertyWorld Ltd., Sarah, checks Mr. Jamal’s bank account, she finds a large cash deposit made from a foreign country with no explanation. This is unusual and raises a red flag.
• Sarah decides to do enhanced Customer Due Diligence (CDD) and discovers that Mr. Jamal has been involved in companies operating in countries with high corruption levels. His financial activities also show patterns of moving large sums of money with no clear explanation.
• Sarah files a Suspicious Activity Report (SAR) to the authorities. The authorities investigate and find out that Mr. Jamal was part of a money laundering operation. Thanks to Sarah’s action, PropertyWorld Ltd. helped prevent illegal activity.

Key Takeaways:

• DNFBPs are businesses like real estate agents, lawyers, accountants, and casinos that can be used to hide illegal financial activities.
• These businesses must follow AML rules, including verifying customers’ identities, keeping records, and reporting suspicious activities.