What Are the High-Risk Industries for Money Laundering and Terrorist Financing?

Money laundering is an unfair way of obtaining legal money through illegal procedures. Despite being the world’s second-largest economy, the UAE battles with the grave issue of money laundering and terrorist financing. For example, these funds are obtained through corruption, human trafficking, or cheating on the tax system regulated by the government.

Money laundering is not only a felony of the law but also works as the aid to finance various terrorism. Given this, the central bank of UAE often updates its anti-money laundering guidelines to track and combat some of the major financial crimes in the world.

Under the guideline, there is detailed information about the daily requirements that every financial institute and corporates must adhere to. In this blog, let us understand the high-risk industries for ML and TF. Further, let us also learn why this matter should be taken seriously and how to do so.

Why Should High-Risk Industries for ML Be Taken Care Of?

High-risk industries for money laundering are often very vulnerable to financial crimes, as it includes a vast transactional procedure daily. 

These industries include: 

• Banks 

• Exchange houses

• Investment institutions

• Real Estate, etc. 

Some of the major consequences of money laundering in these areas are: 

• It can cause an abrupt change in the nation’s economy, giving rise to poverty. It also limits economic growth and decreases productivity in the real sector economy. 

• An increase in money laundering and other financial crimes allows criminals to expand their operations further. This can include human trafficking, embezzlement, and other financial crimes. 

• Money laundering passes the financial power of a country from its citizens and government to criminals, who use it to encourage criminal organizations. Given this, money laundering has presented itself to be a dynamic issue on the global front. 

How to Mitigate Financial Crimes Within Vulnerable Industries?  

Whether in a developed or developing country, money laundering has a series of adverse effects that can change a nation’s economy to its worst. High-risk industries for money laundering stand as a loophole for many criminals. Therefore, according to the government of UAE, there are a few ways to combat financial crimes. They are:

• By following various AML programmes. This includes various AML programmes required to examine and verify the customers. 

• By determining thorough customer due diligence. It includes programmes like KYC, CDD, and EDD. These various financial institutions and corporations can track and prevent any suspicious customers. 

• By hiring an AML office. After businesses hire an AML officer, they can train their employees and keep their system well-integrated with the latest AML compliance. 

• By Complying with an automated AML-trace Solution. AML solutions are one of the finest tools to help companies track financial crime in real time. 

Be a Part of The Solution!

Spread awareness about the importance of AML and follow the guideline provided for it. High-risk industries for money laundering can determine a meaningful message to their industry partners through anti-money laundering programmes. Today is the best day to start practicing its efficiency and deter your business from danger.

Also Read: Sanctions Screening Software: A Vital Tool for Compliance in the UAE