Why High-Value Goods Dealers are exposed to financial crime risk
High-Value Goods Dealers are attractive to organised criminal networks because they trade in luxury assets – such as vehicles, yachts, artwork, jewellery, antiques, and designer goods, that can be purchased, resold or transferred to disguise the origin, ownership or value of illicit funds.
Criminals may exploit these transactions through cash purchases, over-or under-invoicing, use of intermediaries, or rapid resale to integrate criminal proceeds into the legitimate economy. To mitigate these risks, it is essential that high-value goods dealers maintain a robust, enterprise-wide money laundering, terrorism and proliferation financing risk assessment framework.
By systematically identifying and assessing their exposure to financial crime risks and by evaluating the design and operational effectiveness of their mitigating controls in a manner appropriate and proportionate to their nature, size and complexity, they can strengthen compliance, protect their brand reputation and preserve the integrity of the high-value goods market.
For Money Laundering Reporting Officers (MLROs) and senior compliance leaders at High-Value Goods Dealers, the task isn’t simply to satisfy minimum requirements – it’s to demonstrate a deep, defensible understanding of risk that stands up to regulatory review, supports business decision-making and drives proportionate control execution.
Arctic Intelligence’s ML/TF/PF Risk and Control Assessment Solution has been developed specifically for High-Value Goods Dealers. It supports them in meeting regulatory expectations, providing a structured, evidence based, regulator-ready framework that empowers teams to identify, assess and govern financial crime risk across every line of business.
Why High-Value Goods Dealers are targeted by organised criminal networks
High-Value Goods Dealers are inherently exposed to financial crime risk for several reasons:
- Central Role in Converting Cash into Tangible Assets: High-Value Goods Dealers facilitate the purchase, resale and storage of luxury goods such as jewellery, watches, vehicles, art, yachts, bullion and gemstones making them ideal gateways for converting illicit cash into portable, high-value assets that can later be resold or pledged.
- Cash-Intensive and High-Value Transaction Profiles: Large one-off purchases, split payments and structured deposits create low-frequency but high-value transaction patterns that can be exploited to layer and integrate illicit funds.
- Use of Portable and Easily Resalable Assets: Luxury goods are highly liquid in secondary markets, enabling criminals to quickly convert assets back into cash or digital value, obscuring audit trails.
- Cross-Border Trade and Storage Exposure: International shipping, bonded warehouses, freeports and offshore storage facilities increase exposure to high-risk jurisdictions, sanctions regimes and proliferation financing corridors.
- Third-Party Buyers and Nominee Arrangements: Purchases made through family members, associates, shell companies and nominees can obscure beneficial ownership and economic purpose.
- Dealer Networks, Brokers and Consignment Models: Auction houses, brokers and consignment dealers introduce additional entry points with variable verification standards.
- Deferred Delivery, Buy-Back and Trade-In Structures: Trade-in arrangements, buy-back guarantees and delayed delivery provide further pathways for laundering and asset-cycling schemes.
Taken together, these features make High-Value Goods Dealers a primary target for organised criminal networks and place enterprise-wide, evidence-based ML/TF/PF risk assessment at the centre of regulatory expectations.
Introducing Arctic Intelligence’s ML/TF/PF Risk and Control Module for Dealers in High-Value Goods Dealers
Arctic Intelligence’s High-Value Goods Dealers Risk and Control Module provides a comprehensive and configurable foundation for conducting robust, enterprise-wide ML/TF/PF risk assessments tailored to this sector.
This module enables High-Value Goods Dealers to:
- Identify and Prioritise ML/TF/PF Risks: Using High-Value Goods specific risk taxonomies aligned to FATF and supervisory expectations, the module guides dealers through identifying the highest-impact risk areas across customer and beneficial ownership profiles, luxury asset categories (such as jewellery, watches, vehicles, art, yachts and collectibles), wholesale and retail sales channels, cash and alternative payment flows, storage and consignment arrangements and geographic ris exposures.
- Assess Controls and Operational Effectiveness: Moving beyond static compliance checklists, the solution maps controls to real high-value-goods trade risk drivers and enables testing of both design and operational effectiveness – allowing dealers to demonstrate, with evidence, that controls are operating as intended.
- Calculate Residual Risk Transparently: Residual risk reflects a dealer’s true financial crime exposure. Arctic’s module aggregates inherent risk indicators with control performance data to produce defensible residual risk ratings that are directly aligned to risk appetite, escalation thresholds and governance frameworks.
- Produce Audit-Ready Documentation: Built-in audit trails, version history, structured review workflows and aggregated reporting provide regulators, internal audit and senior management with transparent, evidence-based documentation explaining how financial crime risk conclusions were reached and governed.
This solution embeds industry specific typologies, regulatory best practice and global risk methodologies into a scalable, configurable risk and control platform that supports consistent application across business lines, geographies and legal entities.
The built-in audit trail, review logs and Board-ready reporting enable stronger governance oversight while making complex risk outcomes digestible for executives and boards.
Who does this module apply to?
The money laundering, terrorism and proliferation financing risk and control module contains a library of risks, controls and control tests designed specifically for different types of High-Value Goods Dealers:
| Art, Antique and Antiquities Dealers | Pawnbrokers |
| Auction Houses | Secondhand Dealers |
| Cash-in-Transit Services | Precious Metal and Stone Dealers |
| Jewellers and Jewellery Dealers | Watch and Timepiece Dealers |
| Motorised Vehicle Dealers | Private Vaulting Services |
| Other Luxury Goods Providers | Rare Collectibles Dealers |
| Memorabilia Dealers | Safety Deposit Box Services |
What does this module contain?
A. Enterprise-wide ML/TF/PF risk assessment, covering the following risk groups:
- Environmental Risk – covering exposure to internal and external risk indicators.
- Customer Risk – covering customer base profile, customer location risk, legal form risk, industry / occupation risk, PEP risk and customer activity risk.
- Product and Services Risk – covering the services provided by High-Value Goods Dealers that are subject to AML/CTF laws and the inherent risk characteristics of each of these.
- Channel Risk – covering face-to-face and non-face-to-face customer onboarding and transaction channels.
- Industry Red Flag Risks – covering customer behaviour and due diligence evasion, ownership and identity concealment, transactional red flags and unusual or complex business structures.
- Transaction Risk – covering higher risk transaction types.
- Country Risk – covering higher risk country risk exposures based on the residency, nationality or citizenship (Individuals) and country of registration, incorporation, domicile or operations (Entities).
These modules also include a comprehensive library of suggested controls and control tests to support design and operational effectiveness testing.
High-Value Goods Dealers can deploy the content module out-of-the-box or tailor it to their methodology, eliminating the need to start from scratch while maintaining full ownership of their risk model. It also allows firms to import their own risk indicators and controls or enhance the expert-built libraries to suit their bespoke risk methodology and regulatory environment.
B. Product and Services ML/TF/PF risk assessment module, covering different products and services, with inherent ML/TF/PF risk attributes of each over the following inherent risks:
- Art, Antique and Antiquities Dealers – Sale and purchase of fine art, antiques, and cultural artefacts; Brokerage or consignment services for art or antiquities transactions; Acting as intermediary in private sales or gallery transactions; Import/export or cross-border transfers of art or antiquities or Storage, transport, or valuation services associated with high-value pieces.
- Auction Houses – Auctioning of art, antiques, jewellery, vehicles, wine, collectibles and other luxury items; Facilitating payments, holding client funds, or providing escrow for auction proceeds and Acting as intermediary for third-party bidders or consignors.
- Cash-in-Transit (CIT) Service Providers – Physical transport of currency, bullion and other valuables; secure collection, counting, and delivery of cash for clients and storage or vaulting of cash prior to deposit or distribution.
- Jewellers, Luxury Watch and Timepiece Dealers – Sale or trade of gold, diamonds, gemstones, jewellery and luxury watches; custom manufacturing or remodelling of high-value pieces; purchase or resale of pre-owned jewellery and watches and acceptance of cash or third-party payments for luxury items.
- Motorised Vehicle Dealers – Sale, purchase, or trade-in of vehicles (cars, motorcycles, boats, aircraft); leasing, hire-purchase or consignment arrangements and acceptance of large cash deposits or payments.
- Other Luxury Good Providers – Sale or brokerage of designer fashion, handbags, furniture, wine, spirits and lifestyle collectibles; personal shopping, concierge or bespoke acquisition services and cross-border shipping or storage of luxury items.
- Pawnbrokers and Secondhand Dealers – Provision of secured loans against pledged goods (jewellery, watches, electronics, vehicles); buying, selling, or reselling pre-owned items and cash payouts for pawned or redeemed goods.
- Precious Metal and Stone Dealers – Trading, refining, or smelting of gold, silver, platinum, diamonds and gemstones; wholesale and retail sale of precious metals or stones and acting as intermediary or broker in metal or gem transactions.
- Private Vaulting Services – Secure storage of cash, bullion, precious metals, documents or valuables for clients; rental of secure lockers or vault compartments and third-party access or anonymous deposit arrangements.
- Rare Collectibles and Memorabilia Dealers – Sale, brokerage, or auction of rare coins, stamps, sports memorabilia, vintage wine or luxury goods; acting as intermediary or custodian for high-value private sales and import/export or online marketplace transactions.
- Safety Deposit Box Services – Leasing or renting of safe deposit boxes for valuables, cash or documents and custody or access facilitation on behalf of clients or third parties.
C. Channel ML/TF/PF risk assessment module, covering over 30 different inherent ML/TF/PF risk attributes of each over the following risk groups:
- Face-to-Face Channels – covering Internal Physical Channels; Relationship Managed Physical Channels and External Physical Channels.
- Non-Face-to-Face Channels – covering Internal Remote Assisted Channels; Internal Manual Channels; Internal Digital Self-Service Channels; Internal Programmatic / Embedded Access Channels; External Interbank and Payment Infrastructure Channels and External Digital Channels.
- Face-to-Face or Non-Face-to-Face Channels – External Partner Intermediary Channels.
- Customer Onboarding Channels (General) – Channel type; onboarding through face-to-face channels and non-face-to-face channels and customer onboarding through intermediaries.
- Transaction and Delivery Channels – Value of transactions by delivery channel type.
- General Channel Risks – Higher channel risk indicators.
Get started with Arctic Intelligence
Whether you are establishing your first enterprise-wide ML/TF/PF risk assessment or upgrading a legacy spreadsheet-based program, Arctic Intelligence’s High-Value Goods Dealers Risk and Control Module is a scalable, defendable and configurable solution that meets the needs of modern compliance teams.
Book a demo or contact us to explore how our platform can help your business strengthen compliance, mitigate financial crime risk and build a risk program that stands up to regulatory scrutiny.
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