The French National Sanctions Committee (CNS) has penalized a French-licensed online sports betting operator, GU, alongside two of its top executives due to failures in adhering to asset-freezing regulations aimed at combating money laundering and terrorist financing.
This ruling stems from a case prompted by the French regulator, ANJ, which was initiated last year and affirmed by the CNS in July 2023. The ANJ made the decision public this week, detailing the sanctions.
The CNS decided to anonymize the identities involved in the sanctions decision in accordance with procedural guidelines to avoid any undeserved damage to reputations. GU has been subjected to a two-month suspension of its online betting operations along with a €20,000 fine. The former CEO, Monsieur AB, received a two-month prohibition on managing activities within the online betting sector and also faces a €20,000 fine, while Madame BG, the compliance officer, was hit with a similar suspension and a €5,000 fine. No sanctions were imposed on the legal officer or the major shareholder of the company.
The infractions involved an incident where, on December 3, 2023, GU opened an account for an individual listed on France’s asset-freezing register. This opening occurred despite alerts from automated systems triggered the same day. GU did not verify this account until December 14, 2023. The ANJ informed GU and commenced an administrative inquiry on January 3, 2024, leading GU to close the account the following day.
The CNS identified two significant deficiencies in GU’s operations. First, the operator lacked effective systems and procedures to comply with asset-freezing obligations promptly. The failure to act on system alerts breached specific articles of the French monetary and financial code. The CNS emphasized that operators must ensure that prohibited accounts are never created.
Additionally, GU failed to notify the relevant economic authorities about the asset-freezing incident. Notifications that should have occurred on December 3 and January 4 were absent, despite a prior incident of a false positive due to a human error.
The CNS did dismiss a separate claim involving transaction acceptance without verified identity due to insufficient evidence.
In France, online gambling operators face rigorous regulations focused on anti-money laundering and counter-terrorism financing, specifically dictated by the monetary and financial code. Earlier in 2023, the ANJ published a guide designed to assist licensed operators in better managing and mitigating various forms of player fraud, promoting compliance with anti-fraud and anti-money laundering standards without imposing new obligations. Operators are encouraged to enhance documentation, strengthen terms and conditions, and improve technical measures.
