Designated Non-Financial Businesses and Professions, otherwise referred as DNFBP, are subjects of AML regulations developed by FATF in 2012 to prevent criminal activity. It includes industries and professions outside of financial sector, through which money laundering can occur.
The list of DNFBP is constantly being updated and remains relevant. It relates to any money circulating business including e-commerce, gaming and venture funds. An example from the gaming business: during championships there is a window for money laundering through the fund prize. In e-commerce there are many chances for crime as well—unverified merchants could turn out to be scammers. It is likely to come across fraudsters in any industry.
The creation of the list is related to the new types of fraud attacks in the late 1990s, when some fraudsters switched from financial services market to DNFBPs due to the advanced AML measures imposed by monetary institutions.
Local authorities may have their own list of DNFBPs depending on a country, but in general, the following types of businesses are considered DNFBPs:
- Gambling services;
- High-risk corporates;
- Real estate;
- Independent legal services (i.e. notaries, lawyers);
- Precious metals/stones trade;
- Trust and investment funds;
- External audit and accounting;
If a business can potentially be a subject of money laundering, the senior management must monitor the implementation of the relevant AML regulations. Otherwise, regulatory watchdogs will impose fines, if the organization is found non-compliant. In case of data breaches, those who violate the regulations will face a maximum fine of at least twice the amount of the benefit derived from the breach or at least €1 million.
For breaches involving credit or financial institutions, the penalties are even steeper: legal persons will receive a maximum fine of at least €5 million or 10% of total annual turnover.