In July this year, the European Commission launched a consultation on a package of legislative proposals to strengthen the European Union’s (EU) AML framework.
This will see a new EU Anti-Money Laundering Authority (AMLA) established as a centralised body coordinating AML and financial intelligence units across all member states.
New black and greylists will be established to identify countries with higher money laundering risks.
A €10,000 limit for cash payments in the EU will be enforced.
Existing AML controls will be extended to the crypto-asset sector.
In its response to this consultation, EGBA said the introduction of regulation as opposed to a directive would ensure the new controls were legally binding and enforceable.
This would contribute to a “unified, strengthened, and predictable legal framework”.
The fact gambling was included in the proposals was also welcomed by the association.
It said that while existing controls for AML and gambling were reasonable and strict, a uniform framework would ensure they are applied consistently.
EGBA would look to support the controls by introducing the first pan-European guidelines for tackling money laundering in the online gambling sector, it added.
Sector-specific guidance was still lacking, it said, and recommended this be strengthened, in particular for suspicious transaction reporting (STR).
EGBA said it has been calling for the introduction of industry-specific STR for some time and said that the formation of the AMLA would support this aim.
EGBA added that the roles of the AMLA and national authorities should be clearly divided to prevent duplicate reporting, which in turn could reduce administrative and compliance costs.
Meanwhile, EGBA said it welcomed the new “horizontal” rules, saying the harmonisation of customer due diligence (CDD) measures such as internal policies and procedures for risk management could benefit the wider market.
In relation to this, EGBA said clearer rules on the identification of suspicious transactions and requirements related to customer risk analysis would lead to greater clarity through the introduction of uniform rules and their interpretation across the EU.
In order to ensure these new CDD rules were properly applied, it highlighted a number of factors to be considered.
It said the application of EU regulation in non-EU countries, where companies may have subsidiaries, must be clarified to avoid conflict with third-country laws.
Equally, it said the need to establish a business risk profile early in the customer relationship was difficult for the gambling industry.
The purpose and nature of the business relationships in the sector were generally self-evident, meaning the risk profiling was unnecessary.
Finally, EGBA added, it was “of paramount importance” to ensure AML rules do not conflict with other rules such as the EU General Data Protection Regulation (GDPR).
Entities covered by the legislation are not asked to take on functions outside of the scope of their business relationship, it added.
The Commission will now discuss the legislative package with the European Parliament and Council before deciding which proposals to implement.
