Compliance is an industry that never sleeps, and several regulations have been given the light of day in view of the current risks and crimes faced by several industries. The latest financial crime legislations that came into force this year are the Wire Transfer Regulations 2.
The first Wire Transfer Regulations (Regulation (EC) No 1781/2006) were enacted as part of the EU’s anti-money laundering and counter terrorism measures, to sit alongside the various other AML/CTF laws. The Wire Transfer regulations required firms to ensure that electronic fund transfers include sufficient information on the person making the payment. The WRT1 was introduced prior to PSD1. Moreover, WTR2 was developed in conjunction with MLD4 (also known as 4th AML) and acknowledges the role of the SEPA Migration Regulation and the Regulation on Cross Border Payments in the EU.
As opposed to the first WTR, WTR2 requires the information of both the payer and the payee to accompany the transfer of fund, which relates to P2P payments involving payment cards, e-money instruments and digital device payments.
Furthermore, Payee PSP verification obligations now are triggered if funds are greater than €1,000 – the payee PSP is to verify the payee’s details before crediting / making the funds available. If funds are less than €1,000, the payee PSP is to verify the payee details if the payout will be in cash, anonymous e-money or if there is suspected money laundering or terrorist financing.
Historically, Gaming / Gambling Operators and Financial Services firms have been concerned with activities directly sourced by them. With the introduction of the WTR2, it is now more important to look at how settlements processes are being affected, such as pay out of bonuses, and how to screen and use the extra information that is now required by the WTR2.
The introduction of the WTR2 and other industry regulations do not need to add an unnecessary burden to your existing set up. The key is to understand that this is a terrorist-prevention measure and that as such, there is little or no room for risk-based approach or similar considerations. This piece of legislation must be applied and followed in the way it was approved. All necessary checks need to be done in-house or by a specialised firm to make this a simple process. We, at QGen, have the technology and support in place to address these new rules. Our electronic tools can support your processes in a cost-effective manner and help you screen new clients, remediate gaps or help you conduct gap analysis of how these processes will affect your business and clients, help you put measures in place, and keep “business as usual”.
Get in touch with our industry experts to hold a preliminary meeting.