Clearing Banks: ‘Difficult to anticipate’ U.S. Response To Web Shop Scheme

Thursday 12th, June 2014 / 08:49 Published by

money launderingThe head of the Clearing Banks Association said it is “difficult to anticipate” what the reaction of key international bodies and the United States will be to the government’s plan to regularize the web shops, noting that a “challenge” in this regard is that there is “much speculation but little definitive information” about the web shops’ business activities.

Commenting after banking executives warned in Guardian Business on Tuesday that “regularization” plans proposed by the government may not “fix” the problem they represent as far as banks are concerned, Marie Rodland-Allen told Guardian Business that it appears that the unregulated activity being conducted by web shops extends beyond “potential breaches of the Gaming Act”.

While not explicitly clarifying, her comments would seem to be making reference to the fact that some web shops have now started offering financial services, such as loan products – activities which may not be specifically regulated under the Gaming Act proposed by the government.

Pointing to the range of challenges that will arise as the government moves to regulate web shops, Rodland-Allen said: “Regularization of web shop gaming covers the issues of regulating the industry, regulating the participants in the industry and addressing the proceeds of the activity for the period before the activity is regulated.”

She added: “In the modern financial environment, dominated by Financial Action Task Force (FATF) member countries, the proposed regularization covers issues that are of key concern to FATF members. Without knowing the specifics of the proposed legislation, it is difficult to anticipate what may be the reaction from the FATF and, in particular, the United States. Greater scrutiny is also being placed on anti-money laundering (AML) and know-your-customer (KYC) processes of correspondent banking relationships.”

FATF is an inter-governmental body directed and controlled by the G-20/G7 focused on developing and promoting policies to combat money laundering and terrorist financing. In 2000, FATF placed The Bahamas on a damaging “blacklist” of “non-compliant” countries for allegedly having weaknesses in its financial services regulatory regime that could facilitate money laundering.

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