The Gambling Commission is consulting on potential updates to its anti-money laundering (AML) guidance for remote and non-remote casinos. The proposed amendments reflect provisions in the new money laundering regulations (the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017), which came into effect on 26 June 2017, and changes to the Proceeds of Crime Act 2002 introduced by the Criminal Finances Act 2017.
The New Money Laundering Regulations
The published consultation document outlines the various updates proposed by the Commission to ‘The Prevention of Money Laundering and Combating the Financing of Terrorism: Guidance for remote and non-remote casinos’. The Commission – which is the supervisory authority for remote and non-remote casinos in respect of the money laundering regulations – has amended the guidance to reflect the following key changes brought in by the new money laundering regulations:
- Operators must – as well as doing so when they establish a business relationship, suspect money laundering or terrorist financing, or doubt the veracity or adequacy of documents obtained for identification or verification – apply customer due diligence measures in relation to transactions of a certain size. Under the new money laundering regulations, the threshold at which this occurs is no longer based on a customer’s aggregated spend over a 24-hour period, but is now determined by any transaction of €2,000 or more, whether it is a single transaction or occurs in several which appear to be linked. The Commission has put forward new text reflecting this change in the threshold.
- The guidance has been updated to take account of the fact that, under the new money laundering regulations, operators must now apply enhanced due diligence on domestic politically exposed people (PEPs). Previously this was only required on foreign PEPs.
- Under the new money laundering regulations, operators are no longer permitted to outsource the nominated officer roles and responsibilities, something which has previously been common amongst small-scale operators.
In respect of the first two points above, the Commission has requested stakeholders to confirm whether they agree with the Commission’s interpretation of these regulatory changes, and whether the revised text put forward by the Commission provides sufficient guidance in these areas. In respect of the third, the Commission has requested respondents to indicate the costs and impacts that they expect to see as a result of the prohibition on outsourcing nominated officers.
The Commission has also requested feedback on whether the Commission should remain the sole supervisory authority under the money laundering regulations for ‘Money Service Business’ (MSB) activities. Certain activities carried out by non-remote casinos regarding the methods of payment that they accept in respect of gambling services are categorised as MSB activities. HM Revenue and Customs would typically supervise such activities, however by way of an agreement between the Commission and HMRC, the Commission currently performs this supervisory role alone, meaning it is not necessary for non-remote casinos to register with HMRC as well. The Commission intend to continue with this arrangement.
Finally, the new regulations allow casino operators to rely on the customer due diligence carried out by a third party if that third party is either subject to the regulations or an equivalent anti-money laundering regime. However, the operator remains liable for any failure to apply such measures. The Commission has put forward revised guidance describing the conditions for relying on third parties in this regard. The Commission is seeking responses as to whether further guidance is required in this area.
Those wishing to respond to the consultation must do so by 8 September 2017. Following this, the Commission will publish a new version of the guidance. The regulator expects to do so by October 2017 and the changes will take effect immediately.