Over the past decade, the term AML/CTF (Anit-Money Laundering / Counter-terrorism Financing) has become more and more widely used within those providing gambling services. Initially, AUSTRAC concentrated on large institutions involved in transferring money. Today it is expected that all businesses comply with all aspects of the ACT as it pertains to their business.
This article covers one component of AUSTRAC compliance with the AML/CTF KYC (Know Your Client). A recent broadcast by AUSTRAC and subsequent discussions with members of AUSTRAC highlighted KYC as being one of the most critical factors that venues should comply with. Know your customer (KYC) is essential for all small and large venues.
AUSTRAC applies the same rules to those covering hundreds of dollars and to larger institutions that transfer millions of dollars. All components of AML/CTF should start with a risk-based approach. We use a risk matrix to identify the level of risk of the venue. This involves:
| High | Controls | Inherent Risk | |
|---|---|---|---|
| Red | High Risk | Customer identification procedure and maintenance of records | Transfers without appropriate record-keeping |
| Orange | Moderate Risk | ||
| Green | Low Risk |
This matrix shows the overall management and mitigating controls. The control in place should reduce the inherent risk. These controls may not mitigate all risks; however, they will minimise intrinsic risk. A significant factor in ensuring that the controls are appropriately adhered to is emphasizing and implementing a strong gaming compliance culture.
Different levels of risk pertaining to KYC given the venue and the type of customers frequenting the venues.
For example:
- A local pub in a suburban area will have a good relationship between the bar staff and customers. In general, these types of venues have low customer turnover. People staffing the gaming room will know most of the people coming to the pub.
- A hotel that has a mostly transient customer base. For this, the controls mentioned above will be harder to implement. However, the controls that are put in place will bring the risk from red to green.
- A local pub with others in nearby proximity will have inherently moderate risk.
Venues that ensure these controls are in place will have, in general, low risk overall.
- Every cheque paid to a customer should be entered into a spreadsheet. The most important part of this data analysis is the regular sorting of the data and checking whether individual names appear regularly. this forms a part of your compliance program.
The second step is to check whether the winnings of that patron are taken in cash or by cheque. A cross-check should be completed at least monthly to ensure that appropriate documentation is available for all cheque winnings.
Managers or licensees should ensure that all cheque payments have proper identification. Identification and other records must be kept for seven years.
A part of a venue’s AUSTRAC compliance is, as mentioned above, a strong gaming compliance culture. All staff involved in the gaming room should be fully aware of what to watch out for.
The AML Company are experts in Pub and Club AML/CTF compliance. We offer cost-effective and compliant AML/CTF Program solutions to Pubs and Clubs in Australia.
We have been providing AML/CTF compliance programs to the pub and club industry for over 15 years. The AML Company is a boutique company that has provided Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Risk Analysis to Clubs, Pubs, and Financial Institutions for the past 15 years. Our business focus is on AUSTRAC regulations as they pertain to gaming machines within Pubs and Clubs. We aim to make compliance with regulations as easy as possible for our clients.