Overview of SkillOnNet’s AML Breaches
In a recent development, the Danish Gambling Authority has taken significant action against SkillOnNet for multiple breaches of anti-money laundering (AML) regulations. The company was issued with three formal orders and two reprimands following an inspection of its compliance with the Anti-Money Laundering Act. These actions highlight serious shortcomings in SkillOnNet’s risk assessment practices, internal controls, business procedures, and whistleblower scheme.
Inefficient Risk Assessment:
SkillOnNet failed to conduct a comprehensive risk assessment tailored to its business model, including its various products and payment solutions. This deficiency violated Section 7(1) of the Anti-Money Laundering Act, as it hindered the identification of specific AML risks associated with their operations.
Inadequate Business Processes:
The company lacked proper documentation of internal controls within its business processes. This omission breached Section 8(1) of the Anti-Money Laundering Act, as it undermined the ability to verify and maintain effective internal controls.
Lack of Implemented Controls Documentation:
SkillOnNet was also found to have insufficient documentation regarding the implementation of internal controls. This breach also fell under Section 8(1) of the Anti-Money Laundering Act, highlighting a failure to adequately demonstrate compliance through documented processes.
Inadequate Business Practices:
SkillOnNet’s pre-October 16, 2023, business procedures for customer relationship establishment were deemed inefficient. The Danish Gambling Authority pointed out a significant discrepancy between documented business procedures and actual practices, contravening several sections of the Anti-Money Laundering Act.
Whistleblower Scheme Deficiencies:
Prior to June 2023, SkillOnNet’s whistleblower scheme was accessible only via email, lacking necessary anonymity safeguards. This inadequacy violated Section 35(1) of the Anti-Money Laundering Act, which emphasizes the importance of protecting whistleblowers’ identities.
Obligations and Corrective Actions
Following these regulatory actions, SkillOnNet is required to take corrective measures:
Submission of a revised risk assessment and other necessary documentation within two months.
Proof of internal implementation of revised measures within six months.
These obligations aim to address the identified deficiencies in risk assessment, internal controls, business processes, and whistleblower protection.
The enforcement actions taken by the Danish Gambling Authority underscore the critical importance of robust AML compliance in the gambling industry. SkillOnNet’s breaches serve as a cautionary tale, highlighting the necessity for gambling operators to implement comprehensive risk assessments, maintain stringent internal controls, adhere to documented business procedures, and safeguard whistleblower anonymity to effectively combat money laundering activities. Compliance with AML regulations not only upholds legal obligations but also contributes to maintaining the integrity and trustworthiness of the gambling sector.