Sector-specific risk assessment – what does it involve?
All obliged entities under the Anti-Money Laundering Act must conduct an enterprise-wide risk assessment. By law, this assessment must be grounded in the risks inherent in the firm’s own business – which in practice means it must be tailored to the sector in which you operate. Generic templates or forms that fail to reflect your organisation’s specific circumstances are not sufficient.
Sector-specific risks differ markedly between, for example, estate agency, accounting services and gaming. The risk assessment must therefore be anchored in actual business operations and kept current as new threat patterns emerge. Today, the supervisory authorities set explicit expectations that the risk assessment is well documented and business-specific – a requirement found lacking in many supervisory reviews.
Examples of sector-specific risk profiles
The enterprise-wide risk assessment should not be confined to generic money-laundering risks – it must reflect the concrete risks arising from the business the company actually conducts. Below are examples of sector-specific risk indicators identified by our aml lawyers, applying a risk-based approach to AML to prevent money laundering while strengthening internal controls:
Estate agency:
- High transaction values combined with limited visibility of the buyer’s or seller’s financial background.
- Use of nominees or trustees to conceal the beneficial owner.
- Payments from foreign accounts or through complex corporate structures.
Accounting and bookkeeping services:
- False or inadequate supporting documentation provided by clients.
- Engagements where the business model or the client’s purpose is unclear.
- Client money accounts at risk of being used to obscure transaction chains.
Gaming:
- Anonymous gaming accounts and insufficient customer due diligence.
- Conversion of gaming balances to cash or transfers to third parties.
- Use of gaming platforms as part of layering criminal proceeds.
A properly executed assessment does more than prevent money laundering: it enhances governance, supports compliance with AML legal requirements and strengthens internal controls across the business. In short, a risk-based approach to AML that is sector-aware is fundamental to strengthening internal controls and safeguarding your firm.
How our AML lawyers can help
At Morling Consulting, our AML lawyers help firms develop enterprise-wide risk assessments that meet AML legal requirements and reflect your specific sector. We also provide ongoing AML compliance consulting, including support in dialogue with supervisory authorities and assistance with internal follow-up. We operate across Europe.
