Last June’s introduction of EU Directive 2015/849, better known as the Fourth Anti-money Laundering directive (AML D4), brought about a change in the way iGaming companies treat risk – and it’s vital that compliance professionals bring themselves up to speed.

Failure to adequately comply with AML regulations could result in regulatory penalties, bad press, and a massive loss of consumer trust. While all the items on the AML D4 list are important, here’s a list of the four biggest risk factors that compliance teams have to manage.

PEPs as owners, beneficial owners, or people of significant control

One of the AML D4 risk guidelines warns that when compliance professionals are contemplating their involvement with a company, they should be on the lookout for any possible associations that the proposed client or business partner might have with politically exposed persons. Finding out if the company itself, its owners, directors, or persons of significant control are PEPs is crucial.

Cash-rich industries

Under the AML D4 guidelines, companies should avoid becoming involved with businesses that have links to sectors that involve significant amounts of cash and/or their beneficial owners. It’s important to understand that cash is hard to trace and is therefore favoured by money launderers.

Cash transactions are one of the simplest methods to transform ill-gotten gains into money that appears to be above-board.

Business interests or dealings in certain high-risk sectors

The AML D4 guidelines stratify corruption risk levels according to certain economic sectors. As far as the assessment and avoidance of risk is concerned, under the AML D4 guidelines, not all industries are equal.

In the case of iGaming companies, these are advised to ensure that they have solid due diligence procedures in place to ensure they are aware of the sectors in which any potential partners or customers operate.

Adverse media reports from credible news outlets

The AML D4 guidelines suggest keeping an eye out for negative stories about potential business partners or customers in news items which include allegations of criminality or terrorism, whether proven or not.

Likewise, if any company or its beneficial owner, or anyone significantly associated with the company is reported to have been subject to an asset freeze due to criminal proceedings or allegations of terrorism or terrorist financing, should set alarm bells ringing for compliance professionals.

Learn how AXON enables you to automate and optimise your regulatory and compliance functions by tracking and reporting on critical data in real-time. This provides a major benefit in time saving, versus a manual process where you are limited to performing individual checks on each data source.

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