By Cristian RADU, Partner at Țuca Zbârcea & Asociații
Claudiu FILIPOIU, Associate at Țuca Zbârcea & Asociații
The Draft Law for the prevention and control of money laundering and terrorist financing (the “Law”), transposing Directive (EU) 2015/849 (“AMLD4”) in the national law, has been recently adopted by the Chamber of Deputies, as a decision-making chamber.
However, the Law must go through several other stages before it becomes effective, as a non-constitutionality claim was raised.
Nevertheless, since the non-constitutionality claim does not refer to the provisions of the Law which concern the gambling industry, we may reasonably estimate that such provisions will probably become effective as adopted by the Chamber of Deputies, and we find that an update on the impact that the AMLD4 implementation draft law will have on the gambling industry is both necessary and useful.
In our previous article, we summarised the main changes on money laundering prevention and control which are relevant for the gambling industry.
Considering that meanwhile the relevant rules went through several changes within the parliamentary procedures, we shall further outline the main obligations of gambling operators, which are provided in the Law as adopted by the Chamber of Deputies.
Obligation to report
Gambling operators shall have the obligation to submit only to the National Office for Prevention and Control of Money Laundering (the “Office”) a suspect activity report, if they know, suspect or have reasonable grounds to suspect that: a) players’ goods (funds) represent proceeds of crime or are related to terrorist financing; or b) the player or player’s proxy/representative/attorney-in-fact are not who they claim to be; or c) the information held by the operator may be used to enforce the provisions of the Law; or d) in any other situations or concerning elements which are likely to raise suspicions as to the nature, the economic purpose or the rationale of the transaction, such as the existence of an abnormal behaviour by reference to player’s profile and when there are indications that the data held on the player are not real or up-to-date, and the player refuses to update them or provides unreasonable explanations.
The said reports shall be immediately submitted to the Office, before any transaction is made, in relation to the player, in complying with the other reporting rules provided by the Draft Law.
Also, gambling operators must report to the Office the transactions in cash, either in RON or in a foreign currency, with a minimum threshold equal to the RON equivalent of EUR 15,000 (the term “transaction” also includes the operations performed in several tranches which are below the RON equivalent of EUR 15,000, but have common elements such as: the transaction parties, the nature or the category of transactions and the amounts concerned), within no more than three business days as of the time of the transaction.
Know-your customer measures
The Law also details the know-your-customer measures that gambling operators will be bound to apply.
Thus, gambling operators must apply the standard know-your-customer measures upon collecting the gains, upon the purchase or exchange of tokens or when transactions are in a minimum amount representing the RON equivalent of at least EUR 2,000, by a single operation.
Operators must apply the standard know-your-customer measures not only to all new customers, but also to the existing customers, depending on the risk, including in case of change in the relevant circumstances concerning the customer.
Standard know-your-customer measures allow for the following:
- a) identifying the customer and checking the identity thereof based on documents, data or information obtained from reliable and independent sources (customer identification must include at least all marital status data mentioned on the identity documents provided by law, as well as data and information provided in the applicable sectoral regulations);
- b) assessing the purpose and nature of the relationship with the customer, and if necessary, obtaining additional information thereon;
- c) continuous monitoring of the relationship with the customer, including by analysing the transactions performed throughout said relationship, for the operator to make sure that said transactions comply with the information held in regard to the customer, the activity profile and risk profile, and that the documents, data or information held are updated and relevant.
When implementing know-your-customer measures, gambling operators shall be under the obligation to keep, in hardcopy or electronic format, in a form allowed for the purpose of judicial proceedings, all records obtained by implementing said measures, such as copies of the identification documents, the monitoring and updates performed, including the information obtained by means of electronic identification, required to comply with the customer due diligence requirements, for a term of five years as of the termination of the relationship with the customer or as of the performance of an occasional transaction.
Upon expiry of the retention period, gambling operators are under the obligation to erase the personal data.