Powers of Gambling Supervision Commission under AML legislation
At the Manx State of the Nation Event in March 2021, some of the supervisory and enforcement powers available to Isle of Man Gambling Supervision Commission (the “GSC”) under the Online Gambling Regulation Act 2001 (“OGRA”) were discussed.
In addition to these powers, the Gambling (Anti-Money Laundering and Countering the Financing of Terrorism) Act 2018 (“the Act”) equips the GSC with further powers that it can use under this AML/CFT legislation.
This feature highlights the range of sanctions that can be brought to bear on non-compliant licence, permit and certificate holders.
Background to the Act
- Within its 2017-2020 Financial Crime Strategy; in the context of ensuring the Isle of Man is a hostile environment for money laundering and terrorist financing, the Government found inadequacies in the powers available to GSC in respect of licenceholders.
- As a Priority Objective, the Government undertook to introduce legislation which provides the GSC with a full range of supervisory and enforcement sanctioning powers.
- The Act came into force in January 2018 - providing the GSC with enhanced supervisory and formidable sanctioning powers.
Summary of powers available to the GSC under the Act
| Section 16 | Restriction | Powers to restrict all or part of activities for a specified period of time. | Possible restrictions on activities include limits on transaction values and payment types. |
| Section 17 | Amendment | Powers to amend licence conditions in order to restrict activities until the GSC is satisfied that AML/CFT failing has been rectified. | Changes to licence conditions could result in operators undertaking CDD at lower thresholds, or seeking GSC approval in advance of undertaking certain activities. |
| Section 18 | Direction | Powers to issue a Direction compelling the performance of specified actions. | Failure to comply with a Direction is a criminal offence which, on summary conviction, carries a tariff of a fine, or custodial sentence, or both. |
| Section 19 | Public statement | Public statement concerning any Direction issued under section 18 or any person that has contravened AML/CFT legislation. (Section 20 - Notice period prior to publication) |
Action is taken under section 19 when it is in the public interest and one month notice is provided, where appropriate. Earlier publication may occur on consent or where its deemed to be in the public interest. |
| Section 21 | Court order | Powers to seek injunctive or remedial orders from the Courts where satisfied that a person has contravened AML/CFT legislation, or any direction or prohibition provided for under the Act. | Action under Section 21 will be pursued by the GSC to prevent further contraventions of AML/CFT legislation and or provisions of the Act. |
| Section 22 | Civil penalty | Application of a civil penalty for contravention under the Act, AML/CFT legislation or for providing false, misleading or in accurate information. | A penalty will not be applied when a decision has been made to revoke an operator's permit, licence or certificate. The methodology used to calculate civil penalties is set out with the GSC’s guidance notes on the Act. |
| Section 23 | Warning notice | Warning notice to an individual who is, or has been, a director, senior manager or controller of an operator, before issuing a Direction under Section 18. | The warning notice may propose the subject of the notice to take a specified action and the time frame in which the action must be taken. May remain valid for three years or terminate earlier where the notice has been addressed. |
| Section 24 | Expert appointment | Appointment of an appropriate expert. | The GSC anticipates utilising its powers under this section to address technical issues or issues that require additional resource to expedite resolution. |
| Section 25 | Direction not to appoint | Direction not to appoint an individual where the GSC deems a person “not fit and proper”. | There may be scope within the Direction for later review, variation or revocation of the Direction by the GSC. |
| Section 26 | Prohibition | Prohibition of “not fit and proper” persons from holding one or more functions. | Subsequent sections (27-29) within the Act provide for notice periods, rights of appeal, variation or revocation of such a prohibition and maintenance and publishing of a list of prohibitions, prohibited individuals and details of the prohibitions by the GSC. |
| Section 30 | Suspension/revocation | Suspension or revocation of licence, permit or certificate at any time. | Section 31 requires the GSC to provide written notice and rationale for the decision, and review the matter on a regular basis. Sanction in this regard will be considered in the most serious of cases, and the GSC will suspend rather than revoke where remediation may still be possible. |
The GSC’s approach
The GSC seeks to be satisfied that issues that pose a risk to the public and the Island’s reputation are given appropriate attention and that such issues are dealt with promptly. Wherever appropriate, the GSC will work with the sector through its normal supervisory processes to address any failings identified.
The GSC’s approach to AML/CFT failings, as set out within the Guidance, is a staged approach:
Stage 1 - Typically, a visit report resulting from a supervisory visit will include actions and deadlines to address any identified areas of weakness or contravention of the AML/CFT legislation.
Stage 2 - The GSC will then work with the subject to ensure that actions are completed.
Stage 3 - Where the GSC has particular concerns in relation to AML/CFT compliance (whether identified through an inspection or not), the matter will be referred to the GSC’s Risk Committee for a ‘Serious Case Review’. “
Our view
Ensuring that your AML/CFT framework, processes and procedures are compliant with the relevant legislation and guidance offer the best defence to adverse regulatory attention and the potential adverse outcomes for individuals and operators.
To discuss the matters raised in this blog, please get in touch. For information about how we can help your business, please visit our Risk & Regulatory services page.
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