Transposition of the directive 849/2015 – regarding the prevention of the use of the financial system for money laundering or terrorism financing – in the national legislation
Series of articles from “The Practice of Gambling” by Anchidim Zagrean, Rombet Vice-President
Directive 849/2015 – regarding the prevention of the use of the financial system for money laundering or terrorism financing – was adopted by The European Parliament and Council on May 20th, 2015, having the term of transposition in the national law 26.06.2017, for all the member states;
What does TFUE provide – at art.288 – regarding the transposition of the directives?
„The directive is binding for each recipient member state with regard to the result to be achieved; leaving the national authorities the competence in what regards the form and the means”.
What is the content of the directive, in what regards the gaming?
The service providers in the gaming field become entities bound to apply the internal law dispositions, by transposing the directive, but the member states may approve, with the exception of the casinos, and based on an appropriate risk evaluation, to except, totally or partially, the providers of certain gaming services from the internal law dispositions for the transposition of the directive, based on the low risk proved by the nature and, as the case may be, by the magnitude of the operations afferent to these services.
The use of an exception, by a member state, should be taken into consideration only in strictly limited and justified conditions and only if the risk of money laundering or terrorism financing is low, and the commission should be notified about such exemptions. The commission communicates the respective decision to the other member states.
The member states make sure that the gaming service providers, as bound entities, apply precaution measures regarding the customer base when performing transaction amounting to at least 2 000 EUR, whether the transaction is performed in a single operation or by multiple operations which seem to be related:
1. upon the gain collection;
2. upon putting a stake;
3. Or in both cases.
Therefore, the gaming organizers from Romania, regardless of the type of gaming they organize and exploit, will be bound to apply the legal law dispositions, which transpose the directive, without being able to benefit of any exemptions, even if in the case of some games the risks of money laundering or terrorism financing are low, given the fact that the state institutions haven’t performed in the period 2015-2017, a relevant study acknowledging this reality.
At the same time, the directive lets at the latitude of the national authorities to establish, for each type of game, function to their characteristics and for reaching the objectives of the directive, by the nature and magnitude of the operations afferent to these services, the modality of organizing the knowledge of the customer base, respectively the choice of the right moment for taking the precaution measures:
1. At the time of collection and distribution of the gains – since it is the first operation provided in the directive, it shows that this is the method applicable to most types of gaming;
2. When the stake is set – for those types of gaming where a stake higher than 2.000 euro becomes relevant and the objectives of the directive are accomplished;
3. In both cases, both at setting the stake and at establishing and paying the prizes – for those types of gaming where the practice of the operations makes it possible and is relevant the knowledge of the customer base, both at setting the stake and at the payment of the prizes, function to the nature and magnitude of operations.
Which is the stage of the law project – regarding the transposition of the directive – in the national legislation?
The law project transposing the Directive (UE) 2015/849 of the European Parliament and Council regarding the prevention of the use of the financial system for money laundering or terrorism financing, was adopted by the Government Resolution from May 31st, 2018 and submitted to the Senate for adoption, in emergency procedure, following to be transmitted to the Chamber of Deputies, which a decisional chamber.
At this date, the European Commission has initiated a procedure against Romania, before the EU Court of Justice, for not having implemented the directive in the national legislation and it also proposed the imposition by the Court of the payment of a flat-rate amount as well as daily penalties, until the necessary measures are taken.
Under these circumstances, it is possible to accelerate the approval of the law project, found in parliament, just like it is possible the adoption of an emergency ordinance by the Government, immediately after the restoring of the parliamentary session this autumn.
Which is the content of the law project in what regards the gaming?
The law project, for the transposition of the directive, establishes that the gaming service providers, as reporting entities, fall under the incidence of the national law, regardless of the type of gaming provided, as defined in the special legislation of the organization and exploitation of gaming in Romania. In what regards the obligation of applying the standard measures of customer base knowledge, given the statute of reporting entities of the gaming organizers, the law project takes over from the directive all the moments of the operations, in the same order, without establishing a practical modality of identification and knowledge of the customer base, specific to each type of game, in view of obtaining relevant results and accomplishing the purpose provided by the directive:
“The reporting entities provided in art. 5 lit. d) are bound to apply the standard measures of customer base knowledge upon the gain collection, upon putting a stake, at buying or exchanging tokens, or in all the cases, when there are performed transactions in an amount higher than 2.000 euro, equivalent in lei, whether the transaction was performed in one operation or in several operations which seem to be related. Also, they have the obligation to keep a record of the transactions for each client and associated to his/her identification data, so as to be able to prove to the competent authorities or to the self-regulation bodies, the accomplishment o this obligation .„
Consequently, it is necessary that until the adoption of the project law, the professional associations as well as the specialized body in the organization, supervision, monitoring and control of the gaming activities from Romania, establish which are the relevant moments and possible to achieve, in order to apply the standard customer base knowledge measures, in view of putting this regulation in agreement with the practice of the activity specific to each type of game.
By the debates which are to take place, the representatives of the entities indicated above, must ask the legislative to clearly establish the obligations for each type of game, so that these obligations may be put in practice, and reach the purpose provided by the directive so as not to become a simple administrative, bureaucratic formality, accomplished with additional costs and even contrary to the objectives of the directive:
“At the same time, the objectives regarding the protection of the society against the criminality and for the protection of the stability and integrity of the financial system of the Union should be put in balance with the need of creating a regulation framework allowing the companies to develop their own business without disproportional expenses related to such compliance.”
„The subsequent collection and processing of the personal data by the bound entities should be limited to what is necessary for the compliance with the requirements of the hereby directive, and the personal data should not make the object of any subsequent processing incompatible with the respective purposes. In particular, the subsequent processing of the personal data in commercial purposes should be strictly forbidden.”
We’ll be back with new opinions, in the next edition of the magazine…
