Tricks and Tips

All professional bettors know the impact of the 4th and 5th Money Laundering Directives focusing on risk and transparency. They brought additional verification checks already reflecting in the KYC policies of financial institutions. That includes e-money institutions like the e-wallets that many gamblers use. The deadline for the 5th Directive is January 10th 2020 but all actors were aligned with it many months before. Now it is the time for the 6th Money Laundering Directive.

The upcoming 6th Money Laundering Directive will complement all previous directives. It will focus on criminal offences and penalties. The EU Member States are required to transpose the 6th Directive into national law by December 3rd 2020. After which, relevant regulations must be implemented by firms within the Member States by June 3rd 2021.

Like the 5th Directive, we expect all actors to be aligned with the 6th Directive long before any deadline. That includes financial institutions too. We can only assume that key changes and implementations will take place within Summer and Autumn 2020. Most probably resulting in new Terms and Conditions from several institutions. You can expect e-mails from them asking you to agree with these new terms in a ”take to or leave it” style.

Expected changes in the 6th Money Laundering Directive

We are in a position to say that regulated firms operating within the European Union are aware of some critical amendments that we highlight.

• They are defining all 22 predicate money laundering offences which all EU Member States must criminalise.
• Aiding and attempting to commit money laundering will be an offence
• Providing a comprehensive definition of money laundering.
• Increasing the minimum prison sentence for money laundering offences for individuals from one year to five years. alongside a variety of other heavy sanctions.
• Penalties for money laundering offences could include prohibition from public welfare benefits, bans from conducting business or forced wind-up of businesses through which the offences were committed.
• Extending criminal liability to legal persons.
• Corporate Bosses may be personally liable for corporate crimes under new ”Failure to supervise” offences.
• Committing all EU Member States for a “more efficient and swifter cross-border cooperation between competent authorities”, as well as requirements to have “effective investigative tools”.
• The Directive requires the Member States to criminalise money laundering arising from six specified predicate offences. Even if the conduct constituting those predicate offence was lawful in the jurisdiction in which it was committed. This will bring confusion. What is considered legal in one Member State, might not be legal in another due to legal gaps and misinterpretations. Not to mention the rest of the planet. One of these six specified offences is ”participation in an organised criminal group” which in our view has a very broader definition.

What about Brexit?

Brexit is an uncertainty factor by default. But it is our solid belief that the UK will choose to adopt the Directive to ensure alignment with the block. There are serious incentives for implementing the Directive, spanning from ”Intact integrity profiles” to ”cost savings” with the European neighbours. This is valid even in a no-deal Brexit.

And what about Gambling?

Professional gamblers know better than anyone that several actors are hiding behind moral curtains. It is very easy for these actors to throw mud in the fan. This will be based on the assumption that the majority of their clients will not pursue legally to protect their rights. We have seen players requested for the source of funds even for deposits as low as 100 pounds showing how far these actors could go.

At the same time, we conclude that financial institutions including e-wallets will be bound to implement all Directives. It is up to their legal teams and management to decide to what extends they are willing to go. The 6th Directive is an even bigger burden for the smart gambler that must be taken under consideration even before it comes into force.