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Regulation, regulation everywhere

January 27, 2020 at 3:00 PM

It can be hard to keep on top of requirements, never mind leverage them for competitive advantage. That’s where PXP Financials’ dedicated regulatory team can help.

We’ve been living and breathing regulatory changes for the past twenty years and are always prepared for the unexpected, to ensure you remain compliant.

So, we know our AML from our CDD, our ID&V from our PEPs. Here’s our take on the fifth EU anti-money laundering directive (5AMLD) and how it impacts the gaming sector.

Background

5AMLD reflects many of the themes present in previous version of the regulation. This includes an expansion of the regulated sector, greater transparency, increased checks on customers in high-risk countries and more co-operation between national authorities.

5AMLD was to be transcribed into local law within EU member states by December 2019. Its provisions are effective now. The UK has also updated its Money Laundering and Terrorist Financing Regulations in line with 5AMLD, which are effective irrespective of Brexit.

The main provisions include:

  • Cryptoasset exchange providers and custodian wallet providers must perform the same customer due diligence (CDD) checks as other regulated entities under 4AMLD. This is useful to know for operators who accept cryptoassets as a method of payment.

  • Prepaid load and top-up values at which CDD checks are required have changed. Operators issuing their own prepaid cards must now perform CDD on customers loading more than €150 or undertaking remote payment transactions over €50. On the acquiring side, payments carried out with anonymous prepaid cards issued in third countries (i.e. non-EU member states) can only be accepted if they meet EU equivalence requirements.

  • Business relationships or transactions involving high-risk third countries now require enhanced customer due diligence (EDD) to manage and mitigate risks. Six measures are specified, including obtaining information on the customer, nature of relationship, source of funds and source of wealth, and conducting enhanced monitoring.

  • Member states must detail the functions within a country that qualify someone to be a politically exposed person (PEP). Relationships with PEPs are automatically subject to EDD. Operators are advised that PEP requirements may differ country to country and that should review their policies and procedures, including around senior management sign-off of PEP relationships, in respect of the countries in which they are active.

  • Financial intelligence units (FIUs) and other regulators will be to request certain information from regulated entities to prevent money laundering and terrorist financing. Operators must provide details, including the identity and personal data of account holders, account information etc., fully and rapidly on request. They are advised to maintain adequate records for at least five years after the end of the relationship or the date of an occasional transaction.

  • Law enforcement and FIUs across Europe already co-operate on AML and CFT matters. New provisions formalise the co-operation and sharing of information to detect and prosecute financial crime. This is primarily around requesting information from regulated entities as described above.

 

To find out more

For more information around the impact of regulation on your business, e-mail sales@pxpfinancial.com or complete your details on the contact form below.

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