Order to Spreadex Limited for breach of the Anti-Money Laundering Act

The reaction was given in connection with the Danish Gambling Authority's inspection of Spreadex' material that Spreadex has prepared to comply with the Danish Anti-Money Laundering Act's requirement that Spreadex must identify and assess the risk of Spreadex being misused for money laundering and financing of terrorism.

The order was issued because Spreadex's risk assessment is inadequate, as it contains an insufficient identification and assessment of risk factors associated with Spreadex's payment solutions.

The order was also issued because Spreadex's risk assessment is inadequate as it does not contain a separate assessment of the risk of each of Spreadex's payment solutions.  

Section 7(1) of the Anti-Money Laundering Act states that companies subject to the Act must, among other things, identify and assess risk factors associated with transactions. 

Thereby, Spreadex has not complied with the obligation of a risk assessment of section 7(1) of the Anti-Money Laundering Act.

The Danish Gambling Authority assesses that an inadequate risk assessment may increase Spreadex's risk of being misused for money laundering. The purpose of the risk assessment is to provide the gambling operator with a useful tool that gives an overview and understanding of where and to what extent the gambling operator is exposed to being misused for money laundering or financing of terrorism, and what measures are necessary to limit the risks.
 

Duty to act

The order entails an obligation to act for Spreadex. Spreadex must no later than 2 September 2024 submit a revised risk assessment addressing the order. 

Learning points

Gambling operators should ask themselves the following questions based on the breaches identified above to prevent their business from being misused for money laundering and financing of terrorism:

• Have we identified and assessed the risk of money laundering and financing of terrorism for all parts of our business model, including each payment solution? 
• Have we separately risk assessed the individual identified risk factors included in our risk assessment?
• Have we risk assessed each payment solution separately?