Skip to main content

Anti-money laundering

The latest AML news for gambling businesses

__________________________________________

15 March 2017

Transposition of the EU 4th Money Laundering Directive

The Government has published its response to the consultation on the EU 4th Money Laundering Directive (4MLD).

Having considered responses to the consultation and taken into account the UK’s National Risk Assessment (NRA), which deems gambling to be low risk relative to other regulated sectors, the Government has decided to utilise the powers provided within the directive to exempt gambling sectors which are lower risk, apart from non-remote and remote casinos, which cannot be exempted.

Therefore, the current position will be maintained where only holders of casino operating licences will be subject to the requirements under the new Money Laundering Regulations.

However, government recognise that risk remains in the gambling industry and improvements need to be made through continual efforts. The government has made clear that it will regularly review its position in relation to the money laundering and terrorist financing risk that gambling providers present.

Moreover it has asked the Gambling Commission to continue to evaluate this risk across all gambling sectors - taking into consideration the effective implementation and effect of the Gambling Commission’s licensing conditions - and this information will contribute to and influence future NRAs.

Importantly, the Government recognises that the risk levels attributed to a particular gambling sector are not static and will vary over time. As a result, where a gambling sector can no longer be deemed low risk (including where the sector fails to effectively manage the money laundering and terrorist financing risks) then it will likely lead to their inclusion within the provisions of the new Regulations, subjecting that sector to its requirements.

It is therefore imperative that gambling providers comply with the requirements of the Gambling Act and the strengthened Licence Conditions and Codes of Practice (LCCP) to ensure that they have effective policies, procedures and controls in place, and continue to raise standards.

Those operators who will not become subject to the new Regulations are reminded that:

  • they still have other duties to prevent money laundering under the Gambling Act, Proceeds of Crime Act, and the LCCP
  • there is a clear need to further raise standards across the industry
  • government has warned it has the power to include sectors within the new Money Laundering Regulations at a later date if those sectors are assessed as being higher risk.

We will continue to work with the industry to raise standards and assess the effectiveness of operator policies, procedures and controls for anti-money laundering. Where operators fail to meet their obligations, we will not hesitate to take appropriate action. We will also work with LEAs and HMG to improve the effectiveness of AML arrangements.

We have published our risk assessment of the gambling industry which informed the Government’s response to the consultation. This assessment will be reviewed on an annual basis and will contribute to determining the Commission’s focus and to influence future NRAs and in particular whether providers of gambling services other than casinos should continue to be exempt from the requirements of the Money Laundering Regulations.

The new Money Laundering Regulations will be introduced in June 2017.

__________________________________________

10 March 2017

A reminder for gambling businesses about accepting third party payments

__________________________________________

8 November 2016

Revised anti-money laundering advice for operators (excluding casino operators)

We have revised and published our new anti-money laundering advice for operators (excluding casino operators).

The purpose of the third edition of Duties and responsibilities under the Proceeds of Crime Act 2002 Advice to operators (excluding casino operators) is primarily to incorporate new advice in relation to risk assessments in support of the new anti-money laundering licence condition.

Operators should use the updated advice in conjunction with the AML licence condition contained within the LCCP which came into effect on 31 October 2016.

We have also updated our Proceeds of Crime Act 2002 quick guide for small businesses to reflect the new licence condition.


4 October 2016

Progress update - Changes to the glossary codes for suspicious activity reports (SARs)

There have been some changes to SARs glossary codes. The UK Financial Intelligence Unit (UKFIU) has revised the glossary codes in order to:

  • assist in quickly identifying SARs which require fast-tracking and priority attention by end users
  • enable more effective strategic analysis and trend reporting
  • enable more efficient analysis in order to feedback patterns and trends to the reporting sectors.

On the 1 October 2016 the new glossary codes were fully implemented making them the only valid glossary codes moving forward until the next code review is conducted. All previous old codes will cease to be recognised and should no longer be used by reporters.

The communication note published by the NCA provides a brief progress update by the NCA. 

The UKFIU has revised its published guidance for the introduction of the revised glossary codes and the reporting routes.


16 September 2016

Transposition of the EU 4th Money Laundering Directive

HM Treasury has published it’s consultation on the transposition of the EU 4th Money Laundering Directive.

This consultation invites views and evidence on the steps that the government proposes to take, or should take, to meet its obligation to transpose the directive into national law. It also seeks views and evidence on the potential costs and benefits of the changes considered.

The consultation includes a number of proposals in relation to gambling services, we therefore encourage operators to respond.

Closing date for responses is 10 November 2016. These should be sent via email to: aml@hmtreasury.gsi.gov.uk or in writing to: Sanctions and Illicit Finance Team, 1 Blue, HM Treasury, 1 Horse Guards Road, London, SW1A 2HQ


14 September 2016

Frozen asset reporting 2016

HM Treasury’s annual Frozen Assets Reporting exercise launched on 13 September 2016 on GOV.UK.

If you hold any assets (eg money held in a customer account) belonging to a person who is subject to financial sanctions you must freeze those assets and report on them. 

Every year the Treasury carries out a review to update their records to reflect any changes to the assets during the reporting period. Treasury requires everyone that holds or controls funds or economic resources belonging to, owned, held, or controlled by a person who is subject to financial sanctions (a designated person), to provide a report to the Office of Financial Sanctions Implementation (OFSI) with the details of these assets. 

Deadline for submission of your report to OFSI is Friday 14 October 2016.

More information and the reporting template can be found on the GOV.UK website

If you have a question or to submit your report email OFSI at ofsi@hmtreasury.gsi.gov.uk.


1 September 2016

Changes to the glossary codes for suspicious activity reports (SARs)

There have been some changes to SARs glossary codes. The UK Financial Intelligence Unit (UKFIU) has revised the glossary codes in order to:

  • assist in quickly identifying SARs which require fast-tracking and priority attention by end users
  • enable more effective strategic analysis and trend reporting
  • enable more efficient analysis in order to feedback patterns and trends to the reporting sectors.

Transition to the new glossary codes will commence on 1 September 2016. The codes will be fully implemented on 1 October 2016 and the old glossary codes will no longer be valid after that.

The UKFIU has published guidance for the introduction of the revised glossary codes and the reporting routes.

A Glossary Code UKFIU Help Desk will also be available during September 2016 (but only for that month) from Monday to Friday 10am - 4pm on 0121 345 5464 or email sarsdataexploitationteam@nca.x.gsi.gov.uk.



28 July 2016

Revised anti-money laundering (AML) guidance for casinos

We have revised and published our new anti-money laundering guidance for non-remote and remote casinos.

The purpose of the third edition of The Prevention of Money Laundering and Combating the Financing of Terrorism – guidance for remote and non-remote is to:

  • incorporate learning from our anti-money laundering case work
  • provide new guidance and update existing guidance in critical areas identified in our compliance and investigation activity
  • update references to the Serious Organised Crime Agency (SOCA) to the National Crime Agency (the NCA), its successor
  • meet the requirements of HM Treasury to review regularly any guidance issued.

We also reviewed the guidance in support of the proposals contained in the anti-money laundering chapter of the consultation on proposed amendments to the Licence conditions and codes of practice (LCCP).

Casino operators should use the updated guidance in conjunction with the AML licence conditions contained within the LCCP which will come into effect in October 2016. The AML guidance will come into force immediately.

We intend that licensees will use the parts of the updated guidance which relate to the amended anti-money laundering licence conditions, in preparation for those conditions coming into effect in October 2016. We intend that this edition of the guidance is the last edition before the EU 4th Money Laundering Directive is transposed into UK legislation.

An updated version of Duties and responsibilities under the Proceeds of Crime Act 2002 – Advice to operators (excluding casino operators) will be published later in the year.



22 July 2016

Update on the 4th Anti-Money Laundering Directive

On the 5 June 2015, the 4th Anti-Money Laundering Directive was formally adopted. The 4th Directive allows Member States to exempt gambling sectors on the basis of proven low risk posed by the nature and scale of their services, following an appropriate risk assessment. HM Treasury are responsible for making any determination of low risk and exemptions.

The Treasury intends to consult on proposals in this area as part of the wider work to transpose the Directive, and all stakeholders will have the opportunity to contribute to the consultation process.

The latest information provided by Treasury is that consultation on transposition of the Directive will be published before the end of the year.

In addition to any consideration concerning proven low risk, the transposition period provides opportunity for the industry to anticipate the requirements of new money laundering regulations.

Operators will need to consider the provisions within their strategic and operational planning, as they develop appropriate capability, policy and procedures.

On 23 June, the EU referendum took place and UK voted to leave the European Union. Until exit negotiations are concluded, the UK remains a full member of the European Union and all the rights and obligations of EU membership remain in force. During this period the Government will continue to negotiate, implement and apply EU legislation.

We will provide updates on implementation as we receive them.

Additionally, operators should also be aware that on 5 July 2016 the European Commission adopted proposals to make amendments to the 4th Directive. These proposals are still to be negotiated by member states and have not yet been incorporated into the 4th Directive. 


19 July 2016

Clarification of the approach to consent requests

The UK Financial Intelligence Unit (FIU) have undertaken a review of the policy and operating procedures relating to requests for ‘consent’ under the Proceeds of Crime Act (POCA) and the Terrorism Act 2000 (TACT).

Read their note Changes to the ‘consent’ approach: Requesting a defence under POCA & TACT.

Changes that have been made are pending any that may be made in light of HM Government’s Action Plan for anti-money laundering and counter-terrorist finance (published on 21 April 2016) and the planned Criminal Finances Bill.

The new approach seeks to address a number of issues, for example:

  • frequent misinterpretation of the effect of ‘consent’
  • continued receipt of poor quality SARs, missing significant information
  • confusion arising where reporters receive no reply from the NCA.

We've been asked to make operators aware of future changes to the glossary codes used by reporters when submitting suspicious activity reports. The NCA will publish guidance alongside the new codes to assist reporters in using them.

Please ensure your registered email address with SAR Online is up-to-date or register if you have not yet done so. 


9 June 2016

New quick guide on the prevention of money laundering

A new quick guide for local licensing officers and the police to raise the awareness and understanding of money laundering and gambling.

Money laundering - Information for licensing officers and local police 


3 May 2016 

Office of Financial Sanctions Implementation

Earlier this year HM Treasury established the Office of Financial Sanctions Implementation (OFSI).

OFSI will support the UK’s foreign policy and national security goals and help maintain the integrity of and confidence in the UK financial services sector. It will build on the work carried out by the Treasury Financial Sanctions team. OFSI’s principal aims are to:

  • Increase awareness of compliance with financial sanctions
  • Ensure that sanction breaches are rapidly detected and effectively addressed
  • Provide a professional service to the public and industry on financial sanctions issues.

In particular, OFSI offers a free alerts service notifying subscribers to changes to sanctions listings to help with compliance.

OFSI has replaced the Asset Freezing Unit, so for assistance and guidance on financial sanctions you need to contact:

Office of Financial Sanctions Implementation
HM Treasury
1 Horse Guards Road
London SW1A 2HQ
ofsi@hmtreasury.gsi.gov.uk
020 7270 5454 


3 May 2016

Action plan for anti-money laundering and counter-terrorist finance

The Home Office and HM Treasury have published their Action Plan for anti-money laundering and counter-terrorist finance. This action plan sets out the steps to strengthen the UK's response to money laundering and terrorist financing, and to protect the safety of its citizens and the overall integrity of the financial system in the UK.

The Action Plan has three principle priorities for the UK, these are:

  • To have a more robust law enforcement response to the threats we face. 
  • To reform the supervisory regime and ensure that those few companies who facilitate or enable money laundering are brought to task.
  • To increase the international reach to tackle money laundering and terrorist financing threats by working with international groups to take action overseas.

The Action Plan will deliver the Government’s strategic aim to make the UK a more hostile place for money laundering and terrorist financing. Delivery will focus on four areas of priority:

  1. A stronger partnership with the private sector
  2. Enhancing the law enforcement response 
  3. Improving the effectiveness of the supervisory regime
  4. Increasing our international reach.

The Action Plan includes a consultation on legislative proposals and a call for information on the AML supervisory regime.

If you would like to provide comments to the Home Office and HM Treasury the deadline for responses is 2 June 2016.


27 April 2016

Lessons to be learned from failures at Gala Coral Group

We are calling on gambling operators to learn lessons from our investigations into failings at the Gala Coral Group Ltd.

As part of a regulatory settlement, which has concluded the Commission’s investigations, Gala Coral Group Ltd has agreed to forfeit more than £846,000 and take steps to improve its anti-money laundering and social responsibility processes. 

Read the full story


29 February 2016

Lessons to be learned from money laundering failures at Paddy Power Group

An operator is set to share lessons with the wider industry and contribute £280,000 to socially responsible causes after failing to keep crime out of gambling and protect vulnerable people. Paddy Power has also agreed to improve its anti-money laundering and social responsibility processes following a Gambling Commission investigation.

Read the full story


15 December 2015

Lessons to be learned from money laundering failures at Caesars casinos

An international casino operator has agreed to improve their anti-money laundering processes, share lessons with the wider industry, and spend £845,000 on socially responsible purposes after failing to do enough to prevent money laundering.

Read the full story


30 September 2015

Proposed amendments to LCCP for all operators in relation to the prevention of crime associated with gambling

This review of the LCCP therefore focuses on improving practices to best support the first of the three licensing objectives set out in the Gambling Act 2005: to keep gambling free from crime and from being associated with crime.

Read the consultation


7 September 2015

Important lessons for the gambling industry on anti-money laundering and social responsibility controls

The Gambling Commission calls on the gambling industry to act on the lessons that have emerged from recent investigations into anti-money laundering and social responsibility shortcomings in Grosvenor Casinos and meccabingo.com, and to critically review the effectiveness of their policies and procedures to prevent gambling being used to support crime or risk more formal regulatory action. 

The key messages for the gambling industry relate to: 

  • monitoring whether appropriate and risk-sensitive policies and procedures relating to the prevention of money laundering and ensuring that people are not exploited or harmed by gambling are being followed effectively
  • ensuring that operators manage the risk of money laundering by taking a range of measures, including a consideration of where the money a customer is gambling with comes from
  • making sure that money laundering risks relating to established customers are monitored effectively on an ongoing basis
  • ensuring that, where there is a suspicion that a customer may be committing money laundering offences, operators take an appropriate range of actions, including both making an appropriate disclosure to law enforcement agencies and reviewing whether to continue with the business relationship with the customer in question
  • having a clear understanding on how to manage the risk of “tipping off” customers
  • effective record keeping
  • misplaced confidence in the effective implementation of policies and procedures.

Read the full public statement


 

15 June 2015

EU 4th Money Laundering Directive adopted

The European Union 4th Anti-Money Laundering Directive has been published in the European Journal. This marks its formal adoption by the EU.

The scope of the 4th Directive is wider than its predecessor (the 3rd Directive) and covers all gambling services. The 3rd Directive, implemented in the UK as the Money Laundering Regulations 2007, only applies to casinos. The 4th Directive will, however, allow Member States to exempt sectors on the basis of proven low risk posed by the nature and scale of their services. HM Treasury is responsible for making any such determination on the basis of ‘appropriate risk assessment’.

See the Gambling Commission’s press release.