On 08 September 2022, a draft document of the Ministry of Finance of Ukraine, “Risk criteria for the Legalization (Laundering) of Proceeds from Crime, the Financing of Terrorism and the Proliferation of Weapons of Mass Destruction” (hereinafter, “Risk Criteria”), was published on the official website of the Ministry of Finance of Ukraine.
I am sure that the Commission for Regulation of Gambling and Lotteries must participate in the development of the regulatory procedure for the consideration of this project concerning economic entities providing lottery and/or gambling services. Without the genuine and effective involvement of relevant public authorities and business associations in the discussion, international partners and business representatives will not have confidence in this project. Accordingly, the legitimacy of this document may later be in question.
In turn, the UGC experts analysed and studied the provisions of this draft regulation and submitted comments and suggestions in the form of a comparative table according to Art. 9 of the Law of Ukraine “About Main Principles of the State Regulatory Policy in Economic Activities Sphere.”
I would like to point out that the Risk Criteria established for gambling operators are not common for the gambling industry.
A gambling operator is not a banking or financial institution, which is why it does not have the right to request information about a gambler, for example, place of work, take interest in his/her personal life, state of affairs, and assets, evaluate the gambler’s social state, request information about his/her financial condition, or ask whether this person is unemployed or poor, etc.
In addition, numerous provisions of these Criteria apply to legal entities, while clients of gambling operators are only individuals. That is why we do not know how to implement these provisions applicable only to legal entities.
Given the importance of the issue, I believe that the draft document of the Ministry of Finance of Ukraine, “Risk criteria for the Legalization (Laundering) of Proceeds from Crime, the Financing of Terrorism and the Proliferation of Weapons of Mass Destruction,” should be amended to make it applicable, namely:
(1) remove items not typical of the activities of gambling operators;
(2) dedicate a separate section to the criteria for gambling operators only;
(3) apply a risk-indicative approach only when a certain threshold amount of the financial transaction is reached.
I believe that financial monitoring standards should be applied only with a full understanding of the activities carried out by the primary financial monitoring subject that will put these standards into practice and should not develop a general approach for all without taking into account the specifics of various business areas.