The UK Gambling Commission (UKGC) has prompted operators to review the Financial Action Task Force’s (FATF) updated AML guidance with regards to safeguarding their customers’ risk-based supervision approach.
Established in 2001 by the G7, the FATF serves as the financial crime and anti-terrorist financing unit responsible for developing intergovernmental cooperation to combat the growing threat of international money laundering.
The FATF’s updated guidance on risk-based supervision warns that companies working in high-risk sectors ‘must move beyond a tick-box approach’ in their efforts to curb financial crime.
The task force recommends that incumbents in high-risk sectors such as gambling, financial services, accountancy, real-estate and virtual asset traders develop a ‘supervisory culture’ across all levels of their related business.
Corporate supervisors must be fully trained with regards to addressing the full spectrum of AML risks associated with their industry and to focus on where resources will be required.
Furthermore, supervisors must be able to cooperate with regulatory authorities and wider financial services stakeholders to develop an in-depth understanding of the risks that their businesses face.
The FATF guidance comprises three parts providing high-level guidance on risk-based supervision, strategies to address common supervision challenges, and providing effective jurisdictional approaches on monitoring high-risk industry transactions.
“The risk-based approach will make supervisors’ efforts to detect and prevent the financial flows that fuel crime and terrorism more effective,” the FATF said in an official statement.
“This is crucial because it is better to detect and prevent money laundering and terrorist financing than to prosecute it after a crime has occurred.”
