New rules for EU institutions for the Prevention of Money Laundering in subsidiaries established in non-EU countries.
When it comes to new threats and dangers, protecting consumers is a priority. In recent months, there has been a worrying increase in online fraud and the incidence of cybercrime. Although many operators are still landing on 5AMLD, they have already announced the new anti-money laundering regulation: 6AMLD. Towards the end of 2018, the European Parliament introduced additional rules to counter the growing global threat of money laundering. The EU’s sixth anti-money laundering directive (6AMLD) had to be transposed into national laws by December 2020, and member states must implement the new rules by 3 June 2021.
However, gambling operators are getting used to this rapidly evolving and increasingly complex regulatory environment, designed to crack down on bad actors. Governments continue to look for ways to protect consumers, while combating new forms of crime that have emerged within an industry increasingly driven by digital technology. Of particular concern is the relatively new phenomenon of gaming and gambling platforms being used as a means to launder money.
Threats of money laundering are increasing and new crimes such as Cybercrime are emerging
6AMLD provides clarification and context around many of the new money laundering threats, which are emerging throughout the global economy, and in particular in the gambling sector. If 5AMLD was about broadening the scope of companies’ anti-money laundering obligations, 6AMLD goes further, providing a more detailed definition of these requirements. As is often the case, regulators cast a wider net to address problems and are now refining these rules to make them more effective and practical.
The new regulation lists 22 predicate offences related to money laundering, providing clear definitions of each specific offence. Importantly, the last of these offences is cybercrime, which for the first time is included within the anti-money laundering regulations. This is significant because it enables organisations and regulators to more easily and effectively root out money laundering offences across a wide range of online activities.
Importantly, the 6AMLD will cover all EU regulated entities, in addition to any UK organisation operating within the EU after Brexit, whatever the outcome of the current political negotiations. Brexit does not represent a path around 6AMLD; any UK operator wishing to operate within the EU must comply with the new rules.
Maximum transparency with 6AMLD
In addition to this, 6AMLD is notable because it is very clear in its aim to single out individuals within an organisation who are responsible for money laundering crimes. The introduction of new offences such as “aiding and abetting” and “attempt and incitement” also extends the criminal liability of those directly responsible for converting the proceeds of crime to being complicit in the laundering process. It is no longer possible for individuals to hide behind a commercial entity; the regulation is designed to provide full transparency around who owns and controls these entities. And, of course, increased penalties will grab the headlines, with minimum prison sentences increased from one to five years.
Quick adaptation and minimisation of risks for operators
While the 6AMLD is very consistent with the spirit of the previous regulations, operators will need to review their anti-money laundering oversight processes and identify areas for improvement within their customer on-boarding and operating models. In response, operators are likely to turn to regulatory technology to further automate their on-boarding processes and access a broader and more robust set of information on potential customers.
However, while 6AMLD represents the next big deadline for gaming risk and compliance professionals, it is really just another marker in a never-ending battle against money laundering. As new threats continue to emerge, the frequency and scope of new regulation will only increase.