Tough new rules for casinos, gambling houses and lottery businesses
The Central Bank has introduced new Customer Due Diligence rules for those carrying on businesses such as casinos, gambling houses or conducting of a lottery, including such business carried out through the internet.
The rules will apply when a customer engages in financial transactions in to or above US $ 3000 or equivalent in Sri Lankan Rupees.
The rules will also cover dealers in precious metals, precious and semi- precious stones when they engage in any cash transaction with a customer in
Sri Lankan Rupees or in any foreign currency equivalent to or above US $ 15000.
These rules cited as the Designated Non- Finance Business ( Customer Due Diligence) Rules, No. 1 of 2018 were published in the Gazette last week under the Financial Transactions Reporting Act.
The rules will also apply when entering into a relationship with a NonGovernmental Organisation or a Not-for-Profit Organisation as well as in relation to politically exposed persons or their immediate family members and close associates.
Real estate agents, when they are involved in transactions for their customers in relation to the buying and selling of real estate will also have to abide by the new rules.
Lawyers, notaries, other independent legal professionals and accountants who prepare for or carry out transactions for their clients in relation to buying and selling of real estate; managing of client money, securities or other assets; management of bank, savings or securities accounts; organization of contributions for the creation, operation or management of companies and buying and selling of business entities will also be covered by the new rules.
The rules make it mandatory for every non-finance busi- ness to take measures specified in these rules for the purpose of identifying, assessing and managing money laundering and terrorist financing risks posed by its customers, by conducting ongoing Customer Due Diligence based on the “risk based approach”.
The intensity and extensiveness of risk management functions will be in compliance with the “risk based approach” and be proportionate to the nature, scale and complexity of the activities of the non- finance business and the level of money laundering and terrorist financing risks.
Every non-finance business will be required to ensure that their foreign branches or majority owned subsidiaries if any, operate in any country which provides less stringent legal provisions for combating money laundering and countering of terrorist financing than those of Sri Lanka, are in compliance with these rules.
Where a non- finance business forms a suspicion of money laundering or terrorist financing, and it reasonably believes that conducting the CDD measures would tip off the customer, it is required to proceed without conducting the CDD measures, but immediately file a Suspicious Transaction Report under the Financial Transactions Reporting Act.