HomeInsightsANTI-MONEY LAUNDERING REGULATIONS – THE GIFT THAT KEEPS ON GIVING

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On Friday the Gambling Commission announced (in a sort of weird early Christmas present) that it will publish the 5th edition of its guidance for remote and non-remote casinos on The prevention of money laundering and combatting the financing of terrorism on 10 January 2020. The guidance will come into force immediately on publication, being the same date that the updated Money Laundering Regulations (the legislation can be viewed here  http://www.legislation.gov.uk/uksi/2019/1511/contents/made) take effect.

The Commission has confirmed that it can’t reasonably expect operators (not even those that have watched Back to the Future over the holidays) to instantly implement changes in line with their view of the world but “expect to see that operators have acted promptly, invested appropriately (if technology is required to accommodate the changes) and implemented changes with the requisite urgency” whilst taking steps to refresh their policies and procedures as appropriate.

In an effort to hint at where the guidance may change materially, the Commission has highlighted what it considers to be the main changes to the Money Laundering Regulations which are applicable to remote and non-remote casinos as being:

  • Taking appropriate measures in preparation for, and during, the adoption of new products or business practices and to assess and mitigate any money laundering risks arising from such adoption, in addition to the existing and similar requirement for new technology (regulation 19)
  • Having specific policies, procedures and controls for the measures described above (regulation 19)
  • Taking appropriate measures to ensure that any agents that operators use for the purposes of their business are given appropriate training in anti-money laundering and counter terrorist financing (regulation 24)
  • Further direction in relation to what information may be regarded as ‘obtained from a reliable source which is independent of the person whose identity is being verified’ (regulation 28)
  • Further requirements for enhanced customer due diligence measures for high-risk third countries, complex or unusually large transactions, and where there are unusual patterns of transactions, or the transactions have no apparent economic or legal purpose, as well as customers who are beneficiaries of life insurance policies or the customer is a third country national who has received citizenship in an EEA state in exchange for the transfer of capital, purchase of property, government bonds or investment in corporate entities in the EEA state (regulation 33)

AML failings have been an area of compliance weakness for the industry in recent years with significant enforcement action taken against operators. We see many clients that have invested significantly to enhance their operations in this tricky area. It is, however, vital that updated policies are being effectively implemented in practice. The Commission is, rightly in our view, keen to challenge whether the words on the page translate into action and this is likely to be the subject of further focus in compliance assessments from Q1 2020.

Festive greetings from the team at Wiggin and wishing you a prosperous 2020.