One of the key reasons to understand about AML/CFT compliance is for the entities falling within the ambit of the DNFBPS. DNBPS or Designated Non-Financial Businesses and Professions as per the Financial Action Task Force (FATF) include:

DNFBPs play a significant role as they are keepers of large amount of information and they act on behalf of their clients in numerous transactions. Many of such transactions are exposed to high risks and extremely vulnerable to AML/CFT risks. Such risks can be due to services offered by such entities to the customers.

All DNFBPs must exhibit their commitment to adopt steps to mitigate risks by developing internal AML/CFT policies, controls, measures and procedures appropriate to the nature and size of their business.

Such policies and procedure must be approved by the senior management of such entities, and if necessary, monitor the implementation of such risk controls, policies and procedures and enhance them from time to time.

Adopting Enhanced CDD measures is a crucial measure to mitigate risks involved in dealing with customer of high risk. Furthermore, DNFBPs should take reasonable measures to identify the source of the funds of the Customer and Beneficial Owner and should increase the degree of ongoing business relationship monitoring and closely examining transactions to identify whether they appear suspicious.

To conclude, DNFBPS must be well-versed with the risks involved with every transactions, if administered without verifying the identity of the client or identifying the source of funds.