Anti-money laundering: EGBA outlines support for consistent EU Anti-money laundering rules

In its response to a recent European Commission consultation, EGBA outlines its support for a consistent application of anti-money laundering (AML) rules across the EU and its commitment to promote the highest standards of AML compliance in Europe’s online gambling sector.

In July this year, the European Commission published a package of legislative proposals to strengthen the EU’s anti-money laundering (AML) framework. The legislative package will now be discussed by the European Parliament and Council. To gather input from other stakeholders, the Commission also recently invited feedback on its proposals through a public consultation.

In its response to the Commission’s consultation, the European Gaming and Betting Association (EGBA) welcomes the Commission’s AML proposals and outlines its support for a consistent application of AML rules across the EU.

Response to the European Commission’s consultation on AML package

EGBA is the Brussels-based industry body representing the leading online gaming and betting operators established, licensed and regulated within the EU.

AML is of one the key compliance priorities for gambling operators coming from the licensing obligations and the very nature of our industry. That is why EGBA has always fully supported the inclusion of the gambling sector into the EU AML framework

EGBA has also been on the forefront of work on AML for the gambling sector by educating and encouraging operators to enforce the highest standards. Thus, EGBA is working on the first pan-European Guidelines on fighting money-laundering for the online gambling industry. Sector-specific guidance is unfortunately still lacking across the EU and EGBA aims to fill in that gap by introducing self-regulation rules that will cover recommendations for conducting risk assessment, customer detection and conducting due diligence for the gambling sector.

EGBA is looking forward to more guidance from proposed EU AML authority (AMLA), such as on customer due diligence measures, enhanced due diligence and even customer risk assessment, which will be very valuable (especially from the perspective of conflicting nature of AML and Data Protection regulations). EGBA has also been calling for the introduction of sector specific Suspicious Transaction Reporting (STR) forms for many years (among others), which may be best achieved by organizing work within AMLA via an industry-specific structure with clusters. It is also important that the tasks of the centralized authority and the national authorities are clearly divided as to prevent potential duplication of reporting and higher administrative and compliance costs.

The Regulation

EGBA welcomes the new proposal in a form of a Regulation, instead of a Directive, since we believe that more binding and directly enforceable rules will contribute to a unified, strengthened, and predictable legal framework.  EGBA considers that the divergence in the application of the 4th AMLD across the EU has been very wide and detrimental to a consistent application of the EU AML Framework. It has led to a lot of unnecessary gold-plating as well as huge compliance and administrative costs for the sector.

EGBA welcomes the approach of the Commission to gambling. The existing thresholds are reasonable and strict, but they need to be applied in a consistent manner, which a Regulation will bring. We also welcome the strengthening of the rules for granting exemptions by Member States to prevent abuses. Member States need to conduct a much more thorough and reasoned assessment before an exception is granted to ensure the system works without gambling sectors being unduly exempted simply because of national lobbying.

EGBA also welcomes the new horizontal rules. In particular, the harmonisation of Customer Due Diligence (CDD) measures such as internal policies and procedures for risk management, clearer rules on the identification of suspicious transactions, and requirements on customer risk analysis will lead to more clarity by introducing uniform rules and their interpretation in the whole of the EU. EGBA would like to bring to the Commission’s attention several issues to keep in mind in this process. The requirement of application of EU Regulation in non-EU countries where a Group has branches and subsidiaries must be clarified as it may lead to conflicts with third-country national laws.

Although we recognize the importance of establishing a business risk profile very early on in the customer relationship, specifically, in the gambling industry the purpose and nature of the business relationship are self-evident and it is not necessary to establish that before entering the relationship.

Finally, it is also of paramount importance to ensure AML rules do not conflict with other rules, such as those of the EU General Data Protection Regulation (GDPR), and that obliged entities should not have to undertake functions not within the framework of their business relationship.

About EGBA

The European Gaming and Betting Association (EGBA) is the Brussels-based trade association representing the leading online gaming and betting operators established, licensed and regulated within the EU, including bet365, Betsson Group, Entain, Flutter, Kindred Group, and William Hill. The Swedish Trade Association for Online Gambling (BOS) is also an affiliate member. EGBA works together with national and EU regulatory authorities and other stakeholders towards a well-regulated and well-channelled online gambling market which provides a high level of consumer protection and takes into account the realities of the internet and online consumer demand. EGBA member companies meet the highest regulatory standards and have 145 online gambling licenses to provide their services to 16 million customers in 17 different European countries. Currently EGBA members account for 25% of Europe’s online gambling gross gaming revenue (GGR).

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