Volume Fee: Risk Categories

Categorizing industries based on risk, especially in the context of money services businesses, can depend on a variety of factors, including the nature of transactions, average transaction value, geographic factors, regulatory compliance, and more.

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While this categorization might not be universally agreed upon, we can offer a general breakdown that might help:

Category A (Least Risky): Industries that generally operate within well-regulated environments, have low average transaction values, and operate primarily within jurisdictions with strong regulatory controls.

  1. Clothing Retail
  2. Grocery Stores
  3. Furniture Retail
  4. Home Improvement Stores
  5. Book Stores
  6. Pharmacies
  7. Software Development and Services
  8. Legal Services
  9. Accounting Services
  10. Consulting Services

Category B: Industries with moderate risk, often due to larger transaction values, increased regulatory scrutiny, or a slightly higher incidence of fraud.

  1. Commercial Real Estate
  2. Residential Real Estate
  3. Healthcare Services (e.g., Hospitals, Clinics)
  4. Pharmaceutical Companies
  5. Insurance Providers
  6. Automobile Dealerships
  7. Commercial Banking
  8. Investment Firms (excluding high-risk areas)
  9. Telecommunication Companies
  10. Utility Providers (Electricity, Water, Gas)

Category C: Industries that deal with high-value transactions, operate in less regulated environments, or have a higher risk due to factors like cross-border transactions.

  1. Import/Export Businesses (various goods)
  2. Luxury Retail (jewelry, high-end fashion)
  3. Fine Art Dealers
  4. Cryptocurrency Exchanges
  5. International Money Transfer Services
  6. Commodities Trading Companies
  7. Precious Metals Dealers
  8. Pawn Shops
  9. Travel and Tourism Agencies
  10. Private Banking and Wealth Management

Category D (Most Risky): Industries typically associated with high-risk transactions due to a high degree of regulatory scrutiny, the risk of fraud, or a link to illicit activities.

  1. Online Casinos and Gambling Sites
  2. Adult Entertainment Industry
  3. Arms and Defense Industry
  4. Private Security Services
  5. Offshore Banking
  6. Precious Gem Dealers
  7. Antiquities and Cultural Artifacts Dealers
  8. Virtual Asset Service Providers (certain cryptocurrencies)
  9. International Art and Rare Item Auction Houses
  10. Businesses operating in high-risk countries and regions (those with weak regulatory environments or high levels of corruption)

It’s important to note that this is a general guide, and the actual risk can vary significantly depending on specific circumstances, such as the exact nature of the business, the specific geographic regions it operates in, the robustness of its internal controls, and other factors. For a more detailed and accurate assessment, it would be best to consult with a risk management expert or a consultant specializing in compliance in the money services business industry.

This page was last updated on June 5, 2023.

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