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What are the impacts of the EU 4th Anti-Money Laundering Directive on UK Gambling Operators?

Gambling operators in the UK are facing significant regulatory changes and need to remain on top of the changes in order to comply with licencing conditions and regulations.

The European Union (EU) has expressed concern at ‘the use of the gambling sector services to launder the proceeds of criminal activity’. This has resulted in gambling services being included in the EU 4th Anti-Money Laundering Directive (4 MLD).

In the UK, the 4 MLD has yet to be enacted however it prompted changes in the Licence Conditions and Codes of Practice (LCCPs) set by the UK Gambling Commission, under the Gambling Act 2005 which took effect from 31 October 2016 and required operators to:

  • have a Money Laundering /Terrorism Financing (ML/TF) risk assessment in place that is reviewed at least annually and also when a ‘trigger event’ occurs;
  • establish appropriate policies, procedures and controls to prevent ML/TF; and
  • ensure that such AML/CTF policies, procedures and controls are implemented effectively, regularly reviewed and revised appropriately to ensure that they remain effective, and take into account any applicable learnings or guidelines published by the Gambling Commission.

The 4 MLD is required to be implemented across all member states by 26 June 2017. Although the UK has voted to leave the EU, this is unlikely to occur before 26 June 2017 and the 4 MLD will remain applicable for the foreseeable future. UK Operators need to be aware of the requirements of the 4 MLD as these are likely to require enhancements to compliance functions and operational processes. The key items to be aware of include:

  • The risk based approach; and
  • Customer due diligence requirements, including the use of simplified and enhanced due diligence.

The document below provides greater insight into the impact of the 4 MLD on UK gambling operators and the changes that operators should be aware of prior to the transposition of the 4 MLD into new UK money laundering regulations.

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