Bureau De Change operations represent the provision of foreign exchange products to both personal and business customers. It covers a wide range of services from the provision of currency for travel purposes to complex currency dealing operations.
In many instances the Bureau De Change will be selling products on behalf of a product provider, for example travelers’ cheques, stored value cards/pre-paid cards. For many firms, operations are based on a relatively low value mass consumer/business basis that normally involves rapid, infrequent, or one-off customer contact for transactions that are well below the requirements for customer due diligence identification checks.
Transactions can be undertaken in a variety of locations including airports, high streets, implants within other organisations such as travel agents, and on a non face-to-face basis, using the internet or telephone.
What are the risks to cheque encashment businesses?
Third party cheque cashers are not normally exposed to large scale money laundering from the most serious crimes such as drug trafficking and robbery, because the flow of cash in a cheque cashing transaction goes in the opposite direction to that required by most money launderers, who need to convert their cash proceeds of crimes. However, cheque cashers must identify and mitigate the risks of their service being used by money launderers seeking to convert or transfer criminal property. The Proceeds of Crime Act has increased the exposure of cheque cashers considerably, since it is impossible to have complete certainty about the legitimacy of any payment.
A potential risk to a cheque encashment service offered by a Principle through Agents or franchisees lies with the Agents/Franchisees themselves. These members could be operating as a ‘shell company’ using the cheque cashing business as a means to cleanse monies that are the proceeds of crime. Monies paid out in cheque encashment are reimbursed to the Agent by the Principal, unwittingly assisting the integration of laundered monies.
A money launderer may use a front company to supply cash to other businesses or coerces others into allowing their accounts to be used for this purpose