UKGC Recommends Fftf To Operators For Risk-Based Supervision

The UK gambling commission persuades casino operators to reassess the guidelines mentioned in the Financial Action Task Force, which now include AML guidance regarding protecting their customers and providing them risk-based supervision.

Founded in 1989, the Financial Action Task Force (FATF) is an intergovernmental organization with an initiative to develop strict guidelines to prevent money laundering. FATF mandate was expanded to include terrorism financing in 2001.

FATF has published a new approach on the “Risk-Based Supervision,” accentuating the companies working in the high-risk areas and must move forward from the tick box approach to avoid the increasing rate of financial crimes.

The FATF recommends companies operating in the high-risk sectors like finance, gambling, real estate, accountancy, and virtual asset traders to develop a “supervisory regime” across their entire functioning of the business.

Supervisors are advised to oversee the requirements and measures needed in the high-risk sectors to implement the anti-money laundering checks and an efficient way to report the suspicion.

Effective high-risk supervision is important to develop a strong money laundering system. The documents provided by the FATF provide guidelines to supervisors on the effective ways they can assess the risk.

FATF AML guideline helps to provide implementations on how to adapt the resource accordingly and include the practical strategies to address the challenges present in the high-risk sectors.

As per the FATF guidelines, a risk-based approach includes tailoring the organizational response to fit the assessed risk.

The approach helps the supervisors to use their available resources to effectively alleviate the money-laundering risks whenever they are identified and seem perfectly aligned with the national concerns.

The FATF guidelines will ensure that the supervisory body from the high-risk sector does not place an unwanted burden on the lower-risk activities, sectors, and entities.

Corporate supervisors must possess full training in asses the potential risk and the entire range of AML risk that they might encounter in the future. Apart from recognition, supervisors should also have full training on effective application to reduce the AML risk.

The updated document produced by FATF is divided into three crucial sections:

  1. High-level guidance on the Risk-Based Supervision
  2. Strategies to access common challenges in the Risk-Based supervision and jurisdictional example.
  3. Examples of effective jurisdictional support on monitoring the AML risk in various countries.

The approach offered by FATF focuses on the methods by which a supervisor, as per his understanding of the and type and weightage of the risk, should use its resources and adopt the risk-appropriate approach.

The FATF guidance identifies some of the crucial specificities in supervising the gambling sector, it does not seem to identify or address specific risks.

The UK Gambling Commission has motivated operators and other employees to review the Financial Action Task Force guidance on money laundering so that they can themselves assess the risk their business is imposing and take preventive steps.

The FATF guidance does not advocate any specific sector of business and only presents guidelines to avoid any money laundering and other misfortunes