Licensing, Compliance and Enforcement Policy: Consultation Response
Proposal 6: Clarification of financing arrangements
New paragraph to be inserted after current paragraph 3.13
The Commission will not grant an operating licence until it is fully satisfied that the operation will not be financed by the proceeds of crime and that profits from the operation will not be used to finance criminal activity. To that end, applicants will be asked to provide information and evidence as required both as to the source of finance of the proposed operation and as to the identity of those connected to the applicant as specified in paragraph 3.11 above.
New paragraph to be inserted after current paragrapgh 3.25
As stated above, the Commission will also wish to be satisfied as to the sources of the applicant’s finance to satisfy itself that such funds are not tainted by illegality.
- Q10. To what extent do you agree that the amended wording will assist operators in better understanding their responsibility to provide full and open information about source of funding for their business?
The majority of respondents agreed with the proposal and noted:
- finance requirements should be ongoing throughout the lifetime of the licence
- integrity of the market is paramount
- the proposed wording is broad and does not allow for a proportionate approach
- it would be beneficial to include examples of documents that would satisfy our evidence requirements
- applications should be considered in the round and against other elements of due diligence investigation.
Respondents also commented as follows:
- use of word ‘tainted’ is pejorative
- there should be specific mention of terrorist financing and sanctions
- concern as to the reference to the Commission being 'fully satisfied', does this indicate the Commission is going beyond its scope, important the Commission acts reasonably and proportionately and in line with legislation.
Following the responses, the Commission has removed the phrase ‘tainted by illegality’ from paragraph 3.25 within the Policy and replaced it with wording that more closely aligns with the first licensing objective.
In relation to providing clearer guidance and examples of documents that would satisfy evidence requirements, we do not intend to provide these because this is a policy statement and funding arrangements can vary significantly. The types of documents that may evidence on source of funding may not be applicable to others.
As set out in the Commission's Statement of principles for licensing and regulation and elsewhere in the Policy, the Commission takes a risk-based and proportionate approach, including in respect to the amount and detail of information an applicant is required to provide. The Commission acts in line with legislation and will continue to do so.
The intention of the new paragraph is to make much clearer to applicants their responsibilities in satisfying the Commission as to source of funding and to make clear the importance of the first licensing objective in relation to source of funding.
Proposal 5: Clarification of suitability criteria Next section
Proposal 7: Addition of new examples to update the Commission about
Last updated: 22 June 2022
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