On 7 June 2023, the Gambling Commission (the “Commission”) issued a revised version of its guidance regarding the prevention of money laundering and combating the financing of terrorism (the “AML Guidance”), applicable to remote and non-remote casino licensees (“Licensees”), to explicitly address proliferation financing.

The Commission defines proliferation financing as:

“The act of providing funds or financial services for use (in whole or in part) in the manufacture, acquisition, development, export, trans-shipment, brokering, transport, transfer, stockpiling of, or otherwise in connection with the possession or use of chemical, biological, radiological or nuclear weapons, including the provision of funds or financial services in connection with the means of delivery of such weapons and other Chemical, Biological, Radiological and Nuclear (CBRN)-related goods and technology, in contravention of a relevant financial sanctions obligation.”

Amongst the various updates made to the AML Guidance, Licensees will need to:

• revise and update their AML risk assessments to assess the risks of proliferation financing to the business, and also update their AML procedures and controls to demonstrate how the business manages and mitigates the risks of proliferation financing;
• ensure staff are adequately trained on the risks of proliferation financing, in addition to the ongoing requirement that staff are trained on the risks of money laundering and terrorist financing;
• ensure their nominated officer is involved in establishing the basis upon which a risk-based approach to the prevention of proliferation financing is put into practice, alongside the standing requirement to do the same in respect of money laundering and terrorist financing; and
• monitor, manage and mitigate the risks associated with business relationships where customers are based in a high-risk third country or where customer due diligence procedures are triggered by transactions where either of the parties to the transaction are resident in a high-risk third country[1].

The explicit reference to proliferation financing in the AML Guidance reflects the Commission’s continued objective to eradicate any funds flowing into a Licensee’s business which could derive from untoward sources. It is without doubt that any future Commission compliance assessments of Licensees’ businesses will focus on the mitigation practices that have been implemented to demonstrate compliance with this requirement. We therefore recommend that Licensees act to implement the above measures, without delay.

Reference

[1] See Schedule 3ZA of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.