Enterprise-wide financial crime Risk Assessment Solutions for other industry sectors

Money laundering is a criminal activity in which the proceeds of illegal activities are disguised as legitimate funds. Not-for-profits and charities are particularly vulnerable to money laundering risks because they often deal with large amounts of cash and have a reputation for being transparent and trustworthy.

To mitigate these risks, not-for-profits and charities should implement a strong anti-money laundering program, including conducting regular risk assessments, training staff on money laundering risks and prevention, and implementing strong policies and procedures for accepting donations and conducting transactions. It is important for not-for-profits and charities to remain vigilant and proactive in identifying and mitigating money laundering risks to protect their reputation and prevent illegal activities.

The money laundering and terrorism financing (ML/TF) risks associated with Non-Profit and Charities includes (but is not limited to):

• Cash donations can be difficult to trace and verify, making them a common method for laundering money. Not-for-profits and charities should have policies in place for accepting and recording cash donations, including verifying the identity of the donor and keeping detailed records of transactions
• Not-for-profits and charities should be aware of complex ownership structures, such as shell companies and trusts, which can be used to disguise the true source of funds. They should conduct due diligence on all donations, particularly those from anonymous sources or from individuals or organisations with complex ownership structures
• International transactions can be particularly vulnerable to money laundering, as they often involve multiple jurisdictions and currencies. Not-for-profits and charities should conduct due diligence on all international transactions, including verifying the identity of the sender and recipient and conducting a risk assessment of the transaction
• Inadequate record keeping can make it difficult to identify suspicious transactions and comply with reporting requirements. Not-for-profits and charities should have clear policies and procedures for record keeping, including regularly reviewing and updating their record
• Not-for-profits and charities should be aware of the risk of funds being misused for illegal activities, such as terrorist financing. They should have policies and procedures in place to prevent the misuse of funds, including conducting due diligence on all donors and beneficiaries and monitoring transactions for suspicious activity.

To mitigate money laundering risks, Non-Profit and Charities are (in some countries) are required to implement anti-money laundering and counter-terrorism financing (AML/CTF) programs. 

These programs must include conducting enterprise-wide money laundering risk assessments (EWRA) to identify and assess the risks and vulnerabilities associated with customers, channels, products and services, business, environmental and geographic risks.  

AML/CTF programs must also contain procedures for identifying and verifying the identity of customers,  ensuring that the sources of funds of investors and counterparties is legitimate, monitoring customer transactions, and reporting suspicious activity to regulatory authorities.

Arctic Intelligence’s AML Accelerate Platform has been purposely tailored for Non-Profit and Charities, if you would like to learn more contact us or book a demo.

Marijuana-related businesses like cannabis and related paraphernalia (i.e., pipes, bongs, rolling machines) face a unique challenge, since the legalisation of cannabis may result in a significant increase in cash transactions, which can make it easier for criminals to launder their money.

However, due to the controversial nature of this industry, many financial institutions are reluctant to offer financial products and services, like opening bank accounts for participants in this sector, which may result in a significant increase in cash transactions, which can make it easier for criminals to launder money.

As a result, some marijuana related businesses are then inclined to turn to alternative forms of financial transactions, such as cash or cryptocurrency, to conduct their business. This can create opportunities for money laundering if these transactions are not properly tracked and documented.

The money laundering and terrorism financing (ML/TF) risks associated with Marijuana Related Businesses includes (but is not limited to):

• Marijuana related businesses may rely heavily on cash transactions due to banking restrictions, which can make it difficult to trace the origin of funds
• The marijuana related business industry may lack transparency due to the complex regulatory environment, which can make it easier for criminals to conceal their activities
• Money laundering laws and regulations can vary from country to country and state to state, creating inconsistencies and making it difficult to enforce AML laws
• The illegal marijuana market can continue to exist in countries and states where cannabis is legal, providing an opportunity for money launderers to operate
• Money laundering activities can occur across state and international borders, making it difficult to trace the flow of funds
• The marijuana related business industry may involve complex ownership structures, making it difficult to identify the ultimate beneficial owner of a business.

To mitigate money laundering risks, Marijuana Related Businesses are (in some countries) required to implement anti-money laundering and counter-terrorism financing (AML/CTF) programs. 

These programs must include conducting enterprise-wide money laundering risk assessments (EWRA) to identify and assess the risks and vulnerabilities associated with customers, channels, products and services, business, environmental and geographic risks.  

AML/CTF programs must also contain procedures for identifying and verifying the identity of customers,  ensuring that the sources of funds of investors and counterparties is legitimate, monitoring customer transactions, and reporting suspicious activity to regulatory authorities.

Arctic Intelligence’s AML Accelerate Platform has been purposely tailored for Marijuana Related Businesses, if you would like to learn more contact us or book a demo.