UKGC’s AML guidance places high responsibility on industry officers

The UK Gambling Commission (UKGC) begins 2019’s legislative agenda publishing its industry guidance onpreventing money laundering and combating the financing of terrorism – (fourth edition)’.

The UKGC’s report is led by the recommendations of the Financial Action Task Force (FATF), a European Union inter-governmental body responsible for setting international standards on anti-money laundering (AML) and counter-terrorism financing (CTF) frameworks and procedures.

To date, legal frameworks on money laundering have focused on the wide-ranging prevention and detection of AML as a mechanism to finance criminal activities.

The UKGC details that it wants its licensed incumbents to have in place the policies, procedures and controls, covering the risks they may face from money laundering and terrorist financing.

“Using the money in casinos, regardless of the amount, that is the proceeds of any crime can amount to money laundering if the person using or taking the money knows or suspects that it is the proceeds of crime.“

“Money laundering offences can be committed by both the customer and casino employees, depending on their respective levels of knowledge or suspicion” the UKGC outlines in its introduction.”

The commission highlights that to date, money laundering undertaken in gambling enterprises has primarily taken two forms – i) ‘classic money laundering’ –  the passing of stolen funds through some form of legitimate business transaction or ii) ‘criminal spend’ – where stolen money is used to fund gambling as a leisure activity.

The UKGC’s report is split into seven key guidance criteria, outlining –  a risk-based approach, customer relationships, senior management responsibility, nominated officers, customer due diligence, record keeping and monitoring of suspicious activities.

Detailing the role of licensed operators in combating money laundering and corruption, the UKGC reiterates that operators must uphold the three licensing principals set out by the Gambling Act 2005:

  • To prevent gambling from becoming a source of crime or disorder
  • That no operator can be associated with criminal activities
  • And ensuring that no operator’s business structures or products can become a mechanism for supporting crime.

Gambling transactions must adhere to ‘The Proceeds of Crime Act – POCA’ – which demand that operators should report instances of known or suspected money laundering or terrorist financing by customers to the National Crime Agency (the NCA).

The UKGC reminds licensed operators that there is ‘no minimum threshold for the management and reporting of suspected money laundering or terrorist financing activity’.

At an executive level, the UKGC states that it is vital that corporate officers have/gain sufficient knowledge of their businesses’ risk exposure combined with the sufficient authority to prevent money laundering and terrorist financing once detected.

“Senior management must be fully engaged in the processes for a casino operator’s assessment of risks for money laundering and terrorist financing and must be involved at every level of the decision making to develop the operator’s policies and processes to comply with the Regulations. Disregard for the legal requirements, for example, turning a blind eye to customers spending criminal proceeds, may result in criminal or regulatory action.”

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