TAIEXTAIEXTechnical assistance and Information Exchange Technical assistance and Information Exchange

instrumentinstrument

April 2015 Damjan RežekApril 2015 Damjan Režek

Persons under obligationPersons under obligation

banks;banks; savings banks;savings banks; payment institutions;payment institutions; post office;post office; management companies of investment funds, management companies of investment funds, founders and managers of mutual pension funds and pension founders and managers of mutual pension funds and pension

companies;companies; brokerage companies;brokerage companies; insurance companies;insurance companies; electronic money;electronic money; currency exchange offices;currency exchange offices; auditing firms and independent auditors;auditing firms and independent auditors; concessionaires organising special gaming in casinos or gaming halls; concessionaires organising special gaming in casinos or gaming halls; organisers regularly offering sport wagers;organisers regularly offering sport wagers; organisers and concessionaires offering games of chance via the organisers and concessionaires offering games of chance via the

Internet or other telecommunications means;Internet or other telecommunications means; pawnbroker shops;pawnbroker shops;

legal entities and natural persons conducting business relating to:legal entities and natural persons conducting business relating to:• granting credits or loans, factoring and financing of commercial granting credits or loans, factoring and financing of commercial

transactions, including forfeiting;transactions, including forfeiting;• financial leasing;financial leasing;• issuing and management of other payment instruments (for instance, bills issuing and management of other payment instruments (for instance, bills

and traveller’s cheques),and traveller’s cheques),;;• issuing of guarantees and other commitments;issuing of guarantees and other commitments;• portfolio management services to third parties and related advice;portfolio management services to third parties and related advice;• safe custody services;safe custody services;• mediation in the conclusion of loan and credit transactions;mediation in the conclusion of loan and credit transactions;• insurance agency services for the purpose of concluding life insurance insurance agency services for the purpose of concluding life insurance

contracts;contracts;• insurance intermediaries in concluding life insurance contracts;insurance intermediaries in concluding life insurance contracts;• accounting services;accounting services;• tax advisory services;tax advisory services;• trust and company services;trade in precious metals and precious stones trust and company services;trade in precious metals and precious stones

and products made from these materials;and products made from these materials;• trade in works of art;trade in works of art;• organisation or execution of auctions ororganisation or execution of auctions or • real property transactionsreal property transactions

DUTIES OF THE OBLIGED DUTIES OF THE OBLIGED ENTITIESENTITIES

- - All obliged entities should report to the Office on all All obliged entities should report to the Office on all transactions suspected to be connected with ML/TFtransactions suspected to be connected with ML/TF

- Obliged entities from the Article 4 of APMLTF Obliged entities from the Article 4 of APMLTF (financial institutions, accountants, casinos, traders with (financial institutions, accountants, casinos, traders with arts, real assets etc.) should send a report to the Office arts, real assets etc.) should send a report to the Office on every on every cash transaction cash transaction exceeding 30.000 EUR (at exceeding 30.000 EUR (at once or within 3 working days after the transaction has once or within 3 working days after the transaction has been performed)been performed)

- Customer due diligenceCustomer due diligence- Customs authorities are obliged to report to the Office - Customs authorities are obliged to report to the Office

every import or export of cash exceeding 10.000 EUR every import or export of cash exceeding 10.000 EUR entering or leaving EU (within 3 days)entering or leaving EU (within 3 days)

- Appointment of authorised person and his/her deputy (organisations of fewer than four employees)

- Education and professional training

- Participation in drawing up the list of indicators

VVerification of the identity of a customererification of the identity of a customer

TThe customer’s identity shall also be he customer’s identity shall also be determined and/or verified in the following determined and/or verified in the following cases: cases:

1.1. upon the customer’s entry into a casino or upon the customer’s entry into a casino or gaming hall; gaming hall;

2.2. each time the customer accesses the safe. each time the customer accesses the safe.

• personal name, permanent or temporary address, date personal name, permanent or temporary address, date and place of birth of the natural person entering the and place of birth of the natural person entering the casino or gaming hall casino or gaming hall

• the date and time of entering the casino or gaming the date and time of entering the casino or gaming hallhall

ROLE OF FIU IN CASE OF THE ROLE OF FIU IN CASE OF THE SUSPICION ON ML/TFSUSPICION ON ML/TF

- RequestsRequests for for additional data, information, documentation from additional data, information, documentation from obliged entitiesobliged entities that have to be sent in 15 days that have to be sent in 15 days

- Request to a state authority or holder of public authority for the Request to a state authority or holder of public authority for the submission of the data submission of the data

- Reguest to a lawyer and notary for the submission of the dataReguest to a lawyer and notary for the submission of the data

- Monitoring of a customer’s financial transactionsMonitoring of a customer’s financial transactions

- Suspending a transactionSuspending a transaction

PROBLEMS - CHALLENGESPROBLEMS - CHALLENGES

- Involvement of the “professional money Involvement of the “professional money launderers”launderers”

- Physical transfers of cashPhysical transfers of cash- Use of companies, which activities have been Use of companies, which activities have been

based on cash (casinos, lotteries, internet etc.)based on cash (casinos, lotteries, internet etc.)- Use of off-shore territoriesUse of off-shore territories- Involvement of transition countriesInvolvement of transition countries- Electronic bankingElectronic banking

SUPERVISIONSUPERVISION

Supervision of implementing the provisions of FIU regulations shall be exercised within their competencies by:

a) the Office, b) Bank of Slovenia, c) Securities Market Agency of the Republic of Slovenia, d) Insurance Supervision Agency, e) Office of the Republic of Slovenia for Gaming Supervision, f) Tax Administration of the Republic of Slovenia, g) Market Inspectorate of the Republic of Slovenia, h) Slovenian Audit Institute, i) Bar Association of Slovenia, and j) Chamber of Notaries of Slovenia.

The supervisory bodies shall have the right and duty to:

1. order measures to remedy the irregularities and deficiencies within the time limit asspecified by it;

2. carry out proceedings in accordance with the law regulating offences;

3. propose the adoption of appropriate measures to the competent authority;

4. order other measures and perform acts for which it is authorised by law or any other regulation

Casse 1Casse 1

Suspicious transactions report from casinoSuspicious transactions report from casino

RReasons for suspicion of money launderingeasons for suspicion of money laundering::

-Slovenian citizen cameSlovenian citizen came inin to to the casino at 13:14 and left at 04:16 the casino at 13:14 and left at 04:16

-He He played on slot machines that allow payment in cash in the amount played on slot machines that allow payment in cash in the amount of € 2,500of € 2,500

-He He paid a minimum bet of € 5 EURpaid a minimum bet of € 5 EUR

-After a few games, he stopped playing and slot machine had issuedAfter a few games, he stopped playing and slot machine had issued himhim a certificate for payment a certificate for payment

- he he hahadd confir confirmationmation that the received the that the received the cash in casinocash in casino

- procedure was repeated 41x (casino was provided all procedure was repeated 41x (casino was provided all the documents relating to the payments), and at the end the documents relating to the payments), and at the end he had a certificate of winnings in the amount of € he had a certificate of winnings in the amount of € 101,393101,393

-aat t cash deskcash desk he got he got cash in the amount of 2,500cash in the amount of 2,500 EUR EUR - - app.app. 20 EUR20 EUR

Activities of FIUActivities of FIU

- we obtained we obtained the the data on all data on all hishis entries entries in to the in to the casinos in casinos in Slovenia Slovenia

- we obtained from the bank data we obtained from the bank data aboutabout transactions on his bank transactions on his bank accountaccount

- wwee sent the notification o sent the notification onn suspicious transactions suspicious transactions toto the the Criminal police Criminal police

RReasons for suspicion of money launderingeasons for suspicion of money laundering

- suspicion that he needed a certificate of suspicion that he needed a certificate of winnings to cover the illegal assets derived from winnings to cover the illegal assets derived from crimcrim

- suspicion that the transactions suspicion that the transactions were were carried out carried out forfor someone else and someone else and that he that he appeared only as appeared only as a a „„straw manstraw man““

Casse 2Casse 2

- - Italian citizen is a regular guest Italian citizen is a regular guest in one in one of Slovenian casinosof Slovenian casinos

2011 – 61x (from 1.7.2011)2011 – 61x (from 1.7.2011)

2012 – 53 x2012 – 53 x

2013 – 38x2013 – 38x

2014 – 18x (since 17.4.2014)2014 – 18x (since 17.4.2014)

- he he has has PPrivilege accountrivilege account in this in this casino casino.. He He executed 510 cashexecuted 510 cash depositdepositss in the in the total total amount of € 11.5 millionamount of € 11.5 million

Suspicious transactions report from casinoSuspicious transactions report from casino

- aa small small partpart of the funds was spent of the funds was spent for gambling, for gambling, a part a part was was withdrawwithdrawnn in cash, part in cash, part was sent towas sent to diferent diferent bank accountsbank accounts::

- 200.000 EUR to bank account in Italy200.000 EUR to bank account in Italy- 170.000 EUR to bank account in Romania170.000 EUR to bank account in Romania- 150.000 EUR to bank account in Slovenia150.000 EUR to bank account in Slovenia- 150.000 EUR to bank account in Austria150.000 EUR to bank account in Austria- 200.000 EUR to another bank account in Slovenia200.000 EUR to another bank account in Slovenia- 350.000 EUR to another bank account in Austria350.000 EUR to another bank account in Austria- 200.000 EUR to another bank account in Austria200.000 EUR to another bank account in Austria

and not the owner of the accountand not the owner of the account

- - it is important that as the sender of funds has been it is important that as the sender of funds has been stated stated casinocasino

Activities of the FIUActivities of the FIU

- w- we obtained data e obtained data aboutabout transactions transactions on hison his bank accounts bank accounts opened inopened in Slovenia Slovenian banksn banks

-he he signed a long-term deposit contractsigned a long-term deposit contracts with s with the Bankthe Bank

-wwe checked the e checked the databasedatabase of cash transactions and found that of cash transactions and found that he he executeexecutedd 982 cash transactions982 cash transactions

RReasons for suspicion of money launderingeasons for suspicion of money laundering

- Italian citizen has brought large sums of cash that Italian citizen has brought large sums of cash that waswas not spent on not spent on gamblinggambling

- with with deposits of cash deposits of cash on Pon Privilegerivilege account account h hee carried out the first carried out the first stage of money launderingstage of money laundering „placement“ „placement“

- an amount of € 1,420,000 was transferred to his bank accountsan amount of € 1,420,000 was transferred to his bank accounts.. He He executed the second phase of money launderingexecuted the second phase of money laundering „layering“. „layering“. He tried He tried to hide the to hide the realreal source of the money source of the money

WWe informede informed on our findings on our findings CCriminal police andriminal police and SOVASOVA

Methods of Money Laundering through the Use of Casino Methods of Money Laundering through the Use of Casino Value InstrumentsValue Instruments::

- Purchase of chips or credits with subsequent Purchase of chips or credits with subsequent redemption of value by way ofredemption of value by way of payment payment documentdocument

- Purchase of chips or winnings from “clean” Purchase of chips or winnings from “clean” players at a higher priceplayers at a higher price

- Use of chips as currency in illegal transactionsUse of chips as currency in illegal transactions

Indicators of Money Laundering Suspicions Related to the Use Indicators of Money Laundering Suspicions Related to the Use ofof CasinoCasino Value Instruments Value Instruments

The following indicators may point out to the possible existence of The following indicators may point out to the possible existence of moneymoney laundering schemes through the use of casino value laundering schemes through the use of casino value instruments:instruments:Purchases and cash outs of casino chips with little or no gaming Purchases and cash outs of casino chips with little or no gaming activity;activity;Multiple exchanges of cash for chips and vice versa during the same Multiple exchanges of cash for chips and vice versa during the same day;day;Similar or equal amount of purchased and cashed out chips;Similar or equal amount of purchased and cashed out chips;Customer purchases chips and leaves casino shortly after;Customer purchases chips and leaves casino shortly after;Purchase of chips through third parties;Purchase of chips through third parties;Detection of chips brought by customers into the casino;Detection of chips brought by customers into the casino;Customer presents for payout chip purchase vouchers dated prior to Customer presents for payout chip purchase vouchers dated prior to date ofdate of redemption; redemption;

•Customer requests to add cash to casino winnings, and then Customer requests to add cash to casino winnings, and then exchanges theexchanges the combined amount for a single cheque or bank combined amount for a single cheque or bank draft;draft;

•Customer purchases chips by depositing multiple cheques or Customer purchases chips by depositing multiple cheques or bank drafts intobank drafts into individual account, or requests the winnings individual account, or requests the winnings to be paid out in form of multipleto be paid out in form of multiple cheques or bank drafts; cheques or bank drafts;

•Customer inserts funds into gaming machines and claims Customer inserts funds into gaming machines and claims those funds as credits onthose funds as credits on individual account with little or no individual account with little or no gaming activity;gaming activity;

•Customer claims gaming machine credit payouts with no Customer claims gaming machine credit payouts with no jackpot;jackpot;

•Customer frequently inserts substantial amounts of cash in Customer frequently inserts substantial amounts of cash in gaming machines thatgaming machines that have high payout percentages and have high payout percentages and does not play "max bet" to limit chances ofdoes not play "max bet" to limit chances of significant losses significant losses or wins, thereby accumulating gaming credits with minimal or wins, thereby accumulating gaming credits with minimal play;play;

•Customer requests transfer of credits to individual account Customer requests transfer of credits to individual account with another casino;with another casino;

•Abrupt changes in wagering or betting pattern;Abrupt changes in wagering or betting pattern;

•Customer’s intention to win is absent or secondary.Customer’s intention to win is absent or secondary.

Methods of Money Laundering through the Methods of Money Laundering through the Structuring of Transactions Structuring of Transactions

Regular depositing of cashRegular depositing of cash

Use of third parties to undertake transactionsUse of third parties to undertake transactions

Utilizing shift changes to conduct transactionsUtilizing shift changes to conduct transactions

Regularly switching the place of gamingRegularly switching the place of gaming

Requesting division of winningsRequesting division of winnings

Indicators of Money Laundering Suspicions Related to Indicators of Money Laundering Suspicions Related to the Structuring of Transactionsthe Structuring of Transactions

Frequent purchases of value instruments and (or) frequent wagers Frequent purchases of value instruments and (or) frequent wagers in cash just below the identification and (or) reporting in cash just below the identification and (or) reporting disclosure thresholds; disclosure thresholds;

Purchases of value instruments with cheques issued by different Purchases of value instruments with cheques issued by different banks with face value just below the identification and (or) banks with face value just below the identification and (or) reporting disclosure thresholds; reporting disclosure thresholds;

Purchases of value instruments with cheques issued on behalf of Purchases of value instruments with cheques issued on behalf of third parties third parties

A third party is present for all transactions of the customer, but does A third party is present for all transactions of the customer, but does not participate in the actual transaction; not participate in the actual transaction;

Use of the customer’s individual account by third parties; Use of the customer’s individual account by third parties;

Cash received from third party for purchasing chips; Cash received from third party for purchasing chips;

Cash handed to third party after exchanging chips; Cash handed to third party after exchanging chips;

Transfer of funds from one individual account to multiple individual Transfer of funds from one individual account to multiple individual accounts; accounts;

Transfer of funds from multiple individual accounts to one individual Transfer of funds from multiple individual accounts to one individual accountaccount; ;

Customer waits for changes of casino personnel shift to purchase Customer waits for changes of casino personnel shift to purchase or exchange chips just below the identification and (or) reporting or exchange chips just below the identification and (or) reporting disclosure thresholds;disclosure thresholds;

Customer moves from table to table or room to room or leaves Customer moves from table to table or room to room or leaves the casino every time before the amounts of transactions reach the casino every time before the amounts of transactions reach the identification and (or) reporting disclosure thresholds; the identification and (or) reporting disclosure thresholds;

Customer requests the winnings to be paid out in form of Customer requests the winnings to be paid out in form of separate cash amounts, multiple cheques or bank drafts just separate cash amounts, multiple cheques or bank drafts just below the identification and (or) reporting disclosure thresholds. below the identification and (or) reporting disclosure thresholds.

Methods of Money Laundering through the Refining of Methods of Money Laundering through the Refining of Banknotes Banknotes

Refining at the cashier’s deskRefining at the cashier’s desk

Refining through “note acceptors” or Refining through “note acceptors” or gaming machines that accept cash gaming machines that accept cash

Use of individual casino accounts for refiningUse of individual casino accounts for refining

Indicators of Money Laundering Suspicions Related to Indicators of Money Laundering Suspicions Related to the Refining of Banknotesthe Refining of Banknotes

Customer in possession of large amounts of bills or coinage; Customer in possession of large amounts of bills or coinage;

Attempt to exchange low denomination notes for high denomination ones for Attempt to exchange low denomination notes for high denomination ones for various reasoning; various reasoning;

Insert low denomination banknotes in “note acceptors” or gaming devices Insert low denomination banknotes in “note acceptors” or gaming devices with little or no gaming activity before redeeming the credits for high with little or no gaming activity before redeeming the credits for high denomination banknotes; denomination banknotes;

Deposit amounts in low denomination banknotes on individual account with Deposit amounts in low denomination banknotes on individual account with little or no play before redeeming the balance of account for high little or no play before redeeming the balance of account for high denomination banknotes. denomination banknotes.

Methods of Money Laundering through the Use of Methods of Money Laundering through the Use of

Individual Accounts and Safe Deposit BoxesIndividual Accounts and Safe Deposit Boxes

Deposits into casino account by various means of paymentDeposits into casino account by various means of payment

Deposits into casino accounts by wire transferDeposits into casino accounts by wire transfer

Use of foreign individual holding accountsUse of foreign individual holding accounts

Use of safety deposit boxes Use of safety deposit boxes

Indicators of Money Laundering Suspicions Related to Indicators of Money Laundering Suspicions Related to the Use of Individual Accounts and Safe Deposit Boxes the Use of Individual Accounts and Safe Deposit Boxes

Deposits of cash, cheques, and wire transfers into individual account Deposits of cash, cheques, and wire transfers into individual account inconsistent with customer profile; inconsistent with customer profile;

Funds withdrawn from individual account shortly after being Funds withdrawn from individual account shortly after being deposited; deposited;

Significant movement of funds through the individual account with Significant movement of funds through the individual account with little or no gambling activity; little or no gambling activity;

Funds credited into an individual account from banks or other Funds credited into an individual account from banks or other individual accounts in high-risk countries, from unknown sources; individual accounts in high-risk countries, from unknown sources;

•Funds debited from an individual account to banks or other individual Funds debited from an individual account to banks or other individual accounts in high-risk countries, to unknown beneficiaries; accounts in high-risk countries, to unknown beneficiaries;

•Use of intermediaries (authorized representatives) to undertake Use of intermediaries (authorized representatives) to undertake transactions; transactions;

•Funds transferred to customer’s individual account from a corporate Funds transferred to customer’s individual account from a corporate accounts; accounts;

•U-turn transactions occurring with funds being transferred (out of U-turn transactions occurring with funds being transferred (out of country) and then the same or similar amounts being returned; country) and then the same or similar amounts being returned;

•Third parties regularly make use of the customer’s individual safe deposit Third parties regularly make use of the customer’s individual safe deposit box. box.

Methods of Money Laundering through the Use of False Methods of Money Laundering through the Use of False Documents and Means of PaymentDocuments and Means of Payment

Use of false identification data Use of false identification data

Use of forged means of paymentUse of forged means of payment

Indicators of Money Laundering Suspicions Indicators of Money Laundering Suspicions Related to the Use of False Documents and Related to the Use of False Documents and

Means of Payment Means of Payment Customers introducing themselves under a fictitious name or different names;Customers introducing themselves under a fictitious name or different names;

Use of identification document with altered or missing entries;Use of identification document with altered or missing entries;

Inconsistent and contradictory identity information presented; Inconsistent and contradictory identity information presented;

Refusal to present any identification document and (or) personal data; Refusal to present any identification document and (or) personal data;

Counterfeit banknotes or cheques used for purchasing value instruments or Counterfeit banknotes or cheques used for purchasing value instruments or replenishing individual account; replenishing individual account;

Forged non-cash means of payment (e.g. debit, credit or gift cards) used for Forged non-cash means of payment (e.g. debit, credit or gift cards) used for purchasing value instruments or replenishing individual account. purchasing value instruments or replenishing individual account.

Methods of Money Laundering through Conspiracy for Methods of Money Laundering through Conspiracy for Fixed Game Fixed Game

Fixed game with another customerFixed game with another customer

Fixed game with a casino employee Fixed game with a casino employee

Indicators of Money Laundering Suspicions Related to Indicators of Money Laundering Suspicions Related to Conspiracy for Fixed GameConspiracy for Fixed Game

Even-money wagering when conducted by a pair of betters Even-money wagering when conducted by a pair of betters covering both sides of an even bet (e.g., in roulette, covering both sides of an even bet (e.g., in roulette, baccarat/mini-baccarat);baccarat/mini-baccarat);

Two or more pairs of customers frequently playing at the same Two or more pairs of customers frequently playing at the same table; table;

Two or more pairs of players frequently wagering against one Two or more pairs of players frequently wagering against one another (the win of one player is “accompanied” by the loss of another (the win of one player is “accompanied” by the loss of the other); the other);

Customer attempting to beCustomer attempting to be friendfriend with with casino casino employees; employees;

Customer prefers to play at the table serviced by Customer prefers to play at the table serviced by a certain dealer; a certain dealer;

Contacts or connections between customers and Contacts or connections between customers and casino staff outside of the casinocasino staff outside of the casino . .

Other Other

Transactions inconsistent with customer profile; Transactions inconsistent with customer profile;

High volume of transactions within a short period; High volume of transactions within a short period;

Abrupt increase in the volume of transactions; Abrupt increase in the volume of transactions;

Customers pertaining to high-risk groups (e.g. PEPs); Customers pertaining to high-risk groups (e.g. PEPs);

Negative information on costumer (e.g. criminal records). Negative information on costumer (e.g. criminal records).