Anti-money-laundering obligations are widely assumed to be a banking matter. They are not. A range of non-financial businesses and professions are designated as reporting entities, and many of them discover this during their first inspection.
Who this reaches
The categories typically include real estate agents, accountants and auditors, notaries and lawyers in certain transactions, company service providers, dealers in precious metals and stones, and businesses accepting large cash payments. Casinos and currency exchange operations are covered separately.
Scope and cash thresholds are set by regulation and are updated periodically, so confirm the current position for your sector rather than relying on an older summary. If your business appears anywhere near these categories, establish your status deliberately instead of assuming you are outside.
Know your customer, in practice
For a small firm the obligations come down to a workable routine:
- Identify and verify the customer, and establish who ultimately owns or controls a corporate client.
- Understand the purpose of the relationship, in enough detail that an unusual transaction would look unusual.
- Apply more scrutiny where the risk is higher — opaque ownership, unclear source of funds, politically exposed persons.
- Keep monitoring, because the relevant information is what the relationship looks like now, not at onboarding.
Reporting and records
Two obligations cause the most difficulty. The first is reporting suspicion: the duty arises from suspicion, not proof, and it comes with a prohibition on alerting the customer. The second is record-keeping, for a prescribed period and in a form you can actually retrieve.
You are also expected to have appointed someone responsible, to have trained staff, and to be able to produce a documented risk assessment of your own business.
The realistic first step
Most firms in scope are not being asked to build a compliance department. They are being asked to demonstrate a proportionate, documented procedure that they actually follow. The gap is usually that nothing has been written down at all — and that is a matter of days to fix, rather than a reason to postpone.