Game of Chance AML ATF ACTIVITIES FIU POLAND

Game of Chance AML / ATF ACTIVITIES FIU POLAND Piotr Przybyłek

Legal basis Polish Gambling Law Act (dated 19 November 2009) Polish Gambling Law sets the terms and conditions of conducting the activity within the field of games of chance, betting and slot machines

Definitions Games of chance shall be games where the prize is either cash or an material prize and where the outcome is notably conditional on chance while their terms and conditions are stipulated by the game regulations Games of chance are for example: number games, cash lotteries, telebingo, cylindrical games, card games, dice games, cash bingo Casinos in Poland undertake high volume/speed financial activities that are similar to financial institutions, but in an entertainment context. Casinos are generally large cash-based businesses

permmision • • Casinos / gambling companies have to act as a joint-stock companies or liability-liability companies with the registered office within the territory of the Republic of Poland The initial capital of a joint-stock company or a limited-liability company running the activity in the scope of: games organised in a casino shall be at least PLN 4. 000, games organised in a cash bingo hall or a bet making point shall be at least PLN 2. 000 New casino / gambling company must indicate the source of initial capital funds and present the documents that certifiyng its legality The members of casino / board company can not be convicted for the criminal crimes, also crimes regarding to ML / TF

SUPERVISION & INSPECTION The Ministry of Finance gives licenses, approves rules of the games in casinos, issues certificates of profession and registers gambling devices

SUPERVISION & INSPECTION Any obligated institution (also casinos) shall apply financial security measures for its clients. Their scope is determined on the basis of risk assessment as for money laundering and terrorist financing, hereinafter referred to as “risk assessment”, resulting from the analysis, taking into account in particular type of a client (natural person, company)

Casinos obligations – natural persons and their representatives • Guest registration system – Polish Gambling Law Act – Polish AML/ATF Act natural persons representatives ID number if not date of birth or the number of an identity document confirming the identity of an alien, or a country code if it was a passport presented

Casinos obligations – corporations Recording of current data from the extract of the Court Registered office and address Tax identyfication number First name, last name, ID number of the person representing entity In the case of a person with no ID number, his/her date of birth

Casinos obligations – organizational units without legal status Recording of current data from a document indicating the name First name, the last name and the ID number of the person representing this unit The organizational form The registered office and address + taxidentificatio n number In the case of a person with no ID number, his/her date of birth

Casinos obligations • Transaction regestration above at least 1. 000 EUR In case of casino operators under the provisions of the Gambling Act of 19 November 2009 , involves purchase or sale of gambling chips of the value equivalent to at least 1. 000 EUR

MONEY LAUNDERING METHODOLOGIES AND INDICATORS Casinos are by nature a cash intensive business and the majority of transactions are cash based Attractive payment form for criminals Organised crime groups seek to control or own casinos Criminals attempt to infiltrate or influence casinos to facilitate theft, fraud, money laundering and other crimes

MONEY LAUNDERING METHODOLOGIES AND INDICATORS Some casinos have been noted (police inspections) as a place where criminals and organised crime figures like to socialise and particularly like to spend and launder their criminal proceeds

The money laundering methods (examples) 1. Use of Casino Value Instruments (cash / casino chips /gaming machine credits /cashier‟s orders / casino cheques / gift certificates / chip purchase vouchers / casino reward cards 2. Use of Casino Accounts (credit accounts) 3. Intentional losses 4. Winnings / intentional losses 5. Currency Exchange 6. Employee Complicity 7. Use of Credit Cards / Debit Cards 8. False Documents

The money laundering methods (examples) Use of Casino Value Instruments (cash / casino chips /gaming machine credits /cashier‟s orders / casino cheques / gift certificates / chip purchase vouchers / casino reward cards Casino value instruments are most often used for money laundering by converting illicit funds from one form to another Case Information identified alleged money launderers using the casino as a preferred method of laundering millions of dollars accumulated from criminal activities. The methods used to launder the money included purchasing and cashing out chips without playing, putting funds through slot machines and claiming credits as a jackpot win and playing games with low returns but higher chances of winning

The money laundering methods (examples) Indicators of ML using casino value instruments Inserting funds into gaming machines and immediately claiming those funds as credits Customers claiming a high level of gaming machine payouts Customer‟s intention to win is absent or secondary Customer in possession of large amounts of coinage or bills Purchasing and cashing out casino chips with little or no gaming activity High volume of transactions within a short period Requests for credit transfers to other casinos Customer purchases chips and leaves casino shortly after

The money laundering methods (examples) Use of Casino Accounts (credit accounts) Casino accounts provide criminals further opportunities to attempt to laundering crime proceeds. Many casinos offer deposit accounts and lines of credit with less scrutiny and CDD requirements than financial institutions Case The money laundering conspiracy involved millions of PLN from organised criminal gangs. The money laundered included the profits from a number of activities including multi-million PLN currency VAT conspiracies in the mobile phone industry. Money was placed on a deposit accounts at a casino and withdrawn a day or so later. Other sums would be gambled. Monies were gambled or exchanged at the casino with an apparently legitimate explanation as to their source

The money laundering methods (examples) Indicators of ML using casino accounts: Funds withdrawn from account shortly after being deposited Significant account activity within a short period of time Account activity with little or no gambling activity Casino account transactions conducted by persons other than the account holder Funds credited into account from country of concern Large amounts of cash deposited from unexplained sources Multiple individuals transferring funds to a single beneficiary Funds transferred from casino account to a charity fund

The money laundering methods (examples) Credit cards / debit cards Casinos in some jurisdictions allow customers to purchase casino chips using credit cards. In cases where the cards are not stolen or fraudulently obtained, the outstanding credit card balances are paid by the card holder at the bank using the illicit funds Case 1 A person residing in Contry A, originally from Central Europe, visited a casino and bought gaming chips for a total value of EUR 400 000 paid for in cash and with credit cards. The casino reported these transactions to the FIU. Based on the history of gambler‘s purchases using credit cards it was determined that his account had been extremely active: it had been inundated with various transfers from companies and, in particular, with many cash deposits. The spouse of the party concerned ran a business in Contry A and maintained underworld links with organised crime from Central Europe

The money laundering methods (examples) Use of Credit Cards / Debit Cards (2)

The money laundering methods (examples) Indicators of ML using credit/debit cards: Purchasing casino chips using credit card. Purchasing casino chips using debit card Customer purchases chips and leaves casino shortly after Use of stolen or fraudulently obtained credit card Use of third parties to purchase chips using credit/debit card Large amounts of cash deposited from unexplained sources Conducting debit card transactions up to the maximum limit Purchasing and cashing out casino chips/plaques with no gaming activity

Floating casinos Involves gaming vessels that travel to international waters to conduct gaming / casino activities The phenomenon of gambling in international waters is an issue for all countries with cruise ships registered or operating within their jurisdiction. While many countries prohibit casinos on ships from operating in territorial waters, cruise ship gambling in international waters is not well regulated

CDD in gaming sector • Customer due diligence is achieved by identification which involves the customer providing their personal information and verification of that identification • 3 rd Party verification – e. g. use of software, or using approved third parties to conduct face to face verification of customer documents • Checking personal documents: government issued ID proving identity & age • PEP’s indentyfication

Gaming sector – suspicious transaction reporting

suspicious transaction reporting • it is a legal obligation for those who work for a casino to know that they are under a duty to report suspicious transactions: – – transcation above value of 1. 000 EUR where casino know about suspicious transaction where casino suspect that transaction is suspicious where casino have reasonable grounds for knowing or suspecting that a person is engaged in money laundering Customer due diligence information are kept for a minimum of 5 years from the date the person concerned ceases to be a registered customer or from the date of the customers most recent activity. These records can be kept in documentary or electronic format

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