The Financial Action Task Force (FATF) has updated its AML guidelines, prompting the UK Gambling Commission (UKGC) to encourage betting operators to implement the new procedures in order to safeguard customers via a risk-based supervision approach.
Underlying that companies working in high-risk sectors ‘must move beyond a tick box approach’ in countering financial crime, the FATF’s updated guidelines have been published in its ‘Risk-Based Supervision’ document.
The FATF guidance is composed of three parts providing i) high-level guidance on risk-based supervision, ii) strategies to address common supervision challenges, and iii) providing effective jurisdictional approaches on monitoring high-risk industry transactions.
The creation of a ‘supervisory culture’ across all levels of business has been recommended to companies operating in high-risk sectors such as gambling, accountancy, financial services, virtual asset trading and real-estate.
Additionally, cooperative supervisors must be fully trained to address the full spectrum of AML risks associated with their respective industries, and have been further encouraged to focus on where resources will be required.
These supervisors must also be able to cooperate with regulatory agencies and general stakeholders in the financial services sector, in order to develop an in-depth understanding of the risks faced by their businesses.
In an official statement, the FATF said: “The risk-based approach will make supervisors efforts to detect and prevent the financial flows that fuel crime and terrorism more effective.
“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.”
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.