FATF’s Updated High Risk Jurisdictions Lists

The Danish Gambling Authority (#DGA) has recently brought attention to the Financial Action Task Force’s (FATF) updated lists of high-risk jurisdictions, specifically the Grey List and the Black List. These lists categorize countries based on their levels of risk concerning #moneylaundering and terrorist financing. The DGA emphasizes the importance of these lists for #gambling operators in assessing the risk profiles of their players.

Understanding FATF’s High-Risk Jurisdictions Lists

Established in 1989, the FATF is an international governmental body dedicated to formulating policies aimed at combating both money laundering and the financing of terrorism. It periodically updates lists of jurisdictions that are considered high-risk due to their insufficient measures against these illicit activities. The two primary lists are:

• Grey List: Jurisdictions under increased monitoring.
• Black List: Jurisdictions that call for action.

The Grey List

The Grey List includes countries that are actively working with the FATF to address strategic deficiencies in their anti-money laundering (AML) and counter-terrorist financing (CTF) regimes. However, these countries still pose a risk and are therefore subject to increased scrutiny. The current jurisdictions on the Grey List are:

• Bulgaria
• Burkina Faso
• Cameroon
• Croatia
• Democratic Republic of the Congo (DRC)
• Haiti
• Kenya
• Mali
• Monaco
• Mozambique
• Namibia
• Nigeria
• Philippines
• Senegal
• South Africa
• South Sudan
• Syria
• Tanzania
• Venezuela
• Vietnam
• Yemen

The Black List

The Black List, on the other hand, includes jurisdictions that are non-cooperative and pose a significant risk due to their severe deficiencies in AML and CTF measures. The jurisdictions on the Black List are:

• Democratic People’s Republic of Korea (North Korea)
• Iran
• Myanmar

Implications for Gambling Operators

Gambling operators in Denmark are required to incorporate FATF’s high-risk jurisdiction lists into their player risk assessments. According to section 17(1) of the Danish AML Act, if a player is assessed as high-risk, operators must conduct enhanced customer due diligence (EDD). This heightened scrutiny aims to mitigate the risk of the gambling sector being used for money laundering or terrorist financing.

Enhanced Customer Due Diligence (EDD)

Enhanced customer due diligence involves a more rigorous assessment process than standard due diligence. It typically includes:

• Detailed verification of the player's identity.
• Analysis of the player's financial background and source of funds.
• Ongoing monitoring of the player’s transactions and activities.
• The AML Act’s Annex 3 outlines high-risk factors, which include the FATF high-risk country lists. Gambling operators must consider these factors when evaluating player risk.

EU Regulation of High-Risk Third Countries

It is important to note that EDD is not automatically required for players from jurisdictions listed on the FATF’s Grey or Black Lists. Instead, EDD is mandated for players from countries listed in the EU Regulation of High-Risk Third Countries, pursuant to section 17(2) of the Danish AML Act. This EU regulation specifically identifies non-EU countries that present significant risks to the financial system.

Conclusion

The focus of the Danish Gambling Authority on the revised high-risk jurisdiction lists by FATF highlights the pivotal role these lists serve in upholding the integrity of the gambling industry. By adhering to these guidelines, gambling operators can better protect themselves and their players from the threats of money laundering and terrorist financing. The ongoing monitoring and rigorous risk assessment processes are vital in upholding the security and trustworthiness of the gambling industry in Denmark.

FAQs

What is the Financial Action Task Force (FATF)?
The FATF is an intergovernmental organization that develops policies to combat money laundering and terrorist financing.

What are the FATF’s high-risk jurisdiction lists?
The FATF’s high-risk jurisdiction lists include the Grey List (jurisdictions under increased monitoring) and the Black List (jurisdictions that call for action).

Why are the FATF lists important for gambling operators?
Gambling operators use these lists to assess the risk profiles of their players and conduct enhanced customer due diligence if necessary.

What is the Grey List?
The Grey List includes countries that are working with the FATF to address deficiencies in their AML and CTF measures.

What is the Black List?
The Black List includes jurisdictions that are non-cooperative and pose significant risks due to severe deficiencies in their AML and CTF measures.

Which countries are on the Grey List?
Countries on the Grey List include Bulgaria, Burkina Faso, Cameroon, Croatia, DR Congo, Haiti, Kenya, Mali, Monaco, Mozambique, Namibia, Nigeria, Philippines, Senegal, South Africa, South Sudan, Syria, Tanzania, Venezuela, Vietnam, and Yemen.

Which countries are on the Black List?
The Black List includes North Korea, Iran, and Myanmar.

What is enhanced customer due diligence (EDD)?
EDD is a more rigorous assessment process than standard due diligence, involving detailed verification of identity, financial background, and ongoing monitoring.

When is EDD required for gambling operators?
EDD is required if a player is assessed as high-risk based on the AML Act’s Annex 3 high-risk factors or if they are from a country listed in the EU Regulation of High-Risk Third Countries.

What is the purpose of the Danish AML Act?
The Danish AML Act aims to prevent money laundering and terrorist financing by setting out requirements for due diligence and risk assessments for gambling operators.