COMPLIANCE
LAW FIRM
Specialising in advising the gambling, finance and bullion sectors on government regulation including Anti-Money Laundering and Counter-Terrorism and AUSTRAC compliance
GOVLAW WEBINARS
NEW! KYC Assist – know your customer (KYC)
Gaming Venue AML/CTF programs must include risk-based systems and controls for Ongoing Customer Due Diligence, which are ‘proactive’ (AUSTRAC guidance).
ECDD Compliance Services works with leading technology and identity verification services to add to gaming venues’ compliance toolkit without disrupting the customer experience.
For more information see our new KYC Assist website.
NEW! KYC Assist – know your customer (KYC)
Gaming Venue AML/CTF programs must include risk-based systems and controls for Ongoing Customer Due Diligence, which are ‘proactive’ (AUSTRAC guidance).
ECDD Compliance Services works with leading technology and identity verification services to add to gaming venues’ compliance toolkit without disrupting the customer experience.
For more information see our new KYC Assist website.
services
REGULATORY ADVICE
Legal advice on AUSTRAC government regulation for Pubs and Clubs, Casinos, Banks, Credit Unions, Building Societies, super funds, stockbrokers, custodians, bullion traders and crypto-currency exchanges.
NEW AML/CTF PROGRAMS
Drafting a new compliance program for your business, including a tailored risk assessment.
AML/CTF INDEPENDENT REVIEWS
Independent Review of your business’ AML/CTF compliance.
AML/CTF TRAINING
Staff and Management training and Board/Committee strategy for AML/CTF compliance. Options include an on-demand smartphone app, webinars and on-site training for your business.
AUSTRAC ENGAGEMENT & EXEMPTIONS
Engagement with regulators on behalf of your business, including regarding compliance issues or to seek an exemption.
COMPLIANCE REPORTING ADVICE
Legal advice on the annual compliance report to AUSTRAC.
services
REGULATORY ADVICE
Legal advice on AUSTRAC government regulation for Pubs and Clubs, Casinos, Banks, Credit Unions, Building Societies, super funds, stockbrokers, custodians, bullion traders and crypto-currency exchanges.
NEW AML/CTF PROGRAMS
Drafting a new compliance program for your business, including a tailored risk assessment.
AML/CTF INDEPENDENT REVIEWS
Independent Review of your business’ AML/CTF compliance.
AML/CTF TRAINING
Staff and Management training and Board/Committee strategy for AML/CTF compliance. Options include an on-demand smartphone app, webinars and on-site training for your business.
AUSTRAC ENGAGEMENT & EXEMPTIONS
Engagement with regulators on behalf of your business, including regarding compliance issues or to seek an exemption.
COMPLIANCE REPORTING ADVICE
Legal advice on the annual compliance report to AUSTRAC.
PURPOSE
GOVLAWTM provides innovative legal and compliance advice and training to businesses on government and regulatory requirements.
We have specialist experience in Commonwealth government regulation for the gambling (including casinos and clubs and pubs), financial (including fintech) and bullion industries for anti-money laundering and counter-terrorism financing (AML/CTF) laws. We can assess and report on the compliance of your business units with AML/CTF legislative requirements.
We are passionate about communicating in plain language about what can often be complex regulatory environments.
NEWS
Important terms
These updates are a summary only and provided as a general information for Pubs and Clubs. It does not constitute legal advice or take into account the facts and circumstances of your gaming venue.
What to do if AUSTRAC asks your Pub or Club to appoint an external auditor…
Earlier this year AUSTRAC changed the procedures around External Auditors which can be appointed to regulated businesses with gambling, such as Clubs or Pubs with gaming machines or ‘pokies’.
Where AUSTRAC finds that a Pub or Club’s compliance with the anti-money laundering and counter-terrorism financing requirements, or risk management is not sufficient, they may require the Pub or Club to appoint an ‘External Auditor’.
In the past, AUSTRAC kept a list of approved auditors on its website. This has changed, and Pubs and Clubs can now nominate an external auditor for consideration by AUSTRAC. This process involves the potential auditor providing information on their relevant expertise to AUSTRAC.
When could this be relevant for my Pub or Club?
Clubs or Pubs regulated by AUSTRAC (which offer gambling to patrons) will be aware of the headline civil penalties for non-compliance of up to $27.5 million (up from $22 million, from 1 January 2023) under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).
However, there are many other steps in compliance, which AUSTRAC can take before an issue escalates to that level. Examples include
- infringement notices (for less serious contraventions with lower fines)
- remedial directions (to take action to repair a contravention)
- court ‘enforceable undertakings’ (these have been issued against Hotels in NSW and Queensland) and
- the Club or Pub being required to appoint an ‘external auditor’.
Despite the title, an ‘external auditor’ does not need to be an ‘auditor’ in the accounting sense, but rather a professional, external to the Pub or Club with relevant expertise.
Where a Club or Pub receives enforcement related correspondence from AUSTRAC, this is a serious matter and professional advice is recommended.
Note: As originally published in the Spring Hub Magazine, Victoria, 2019, page 42.
Andrew Fernbach
Lawyer
© GOVLAW 2019
Can my Club accept a ‘Digital driver licence’ as part of identification for a large
gaming win?
In short yes, but only if your Club’s AML/CTF program includes the ‘risk‑based systems and controls’ required under the AML/CTF Rules* for identifying patrons for large wins, AND the specific provisions needed to ensure the integrity of the identification accepted from the gaming patron for a large win.
Including digital driver licences in your Club’s AML/CTF Program customer identification procedures
AUSTRAC considers digital driver licences issued by an Australian State or Territory government as ‘reliable and independent’ documents. Digital driver licences were launched across NSW and South Australia in 2019 and are anticipated across Victoria by 2024**.
This means that digital driver licences can be used as part of a risk-based customer identification procedure for wins of $10,000 or more, if included in your Club’s AML/CTF program. The AML/CTF Rules require risk-based systems and controls on when gaming staff or management must collect additional know-your-customer (KYC) information and / or take additional steps to verify it.
This may include requiring an additional identification document in addition to the driver licence (whether digital or not) as part of processing the cheque or EFT for the large win.
The program must also include systems to guide staff on how to deal with any discrepancies which arise in the verification process. Checking a digital driver licence and the customer identification process also operates alongside the AML/CTF requirements for ongoing gaming monitoring and ‘enhanced’ customer due diligence requirements (e.g., for ‘high risk’ patrons).
The importance of record keeping
The AML/CTF Act*** requires gaming venues to keep records of identification information and the procedure. Planning, including with your IT service providers may be prudent to ensure records of digital driver licences are able to be kept for seven (7) years prior to adopting digital identification in your Club. If the state government offers the Club a ‘login’ as a verifying business, will any information saved be enough to satisfy Federal law record keeping requirements for large win customer identification?
How does the Club ensure the integrity of a customer’s digital driver licence?
The AML/CTF Rules set out detailed criteria the AML/CTF Program must cover where any identification document is used to verify the identity of a gaming patron. These risk-based steps to ensure the integrity of the process, can include checking the identification offered by the customer:
- has not been ‘forged, tampered with, cancelled or stolen’,
- has not expired and
- is legitimate by using an ‘authentication service’.
Each State or Territory government which issues a digital driver licence provides information for businesses on how to check the validity. This may involve downloading an ‘app’ to scan a QR code or a barcode, checking the government logo animation and the time it was last ‘refreshed’. Further details will be available in Victoria before the state-wide rollout following the trial of digital driver licences in Ballarat.
Conclusion
Digital driver licences can be accepted as part of your Club’s identification procedure for large wins provided the AML/CTF Program is updated with the appropriate risk-based systems and controls relevant for your venue and you have an actionable plan for record keeping.
The detailed requirements of what your Club’s AML/CTF program must include under the AML/CTF Rules can be complex. If in doubt, seek professional advice.
Andrew Fernbach
Lawyer
© GOVLAW 2023
* Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument (2007) No. 1.
** https://www.premier.vic.gov.au/digital-driver-licences-way-victorian-motorists
*** Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth).
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