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#1270686 - 10/21/09 04:52 PM Reg GG-ACHs, Wires, etc.
ComplianceGurl, CRCM Offline
Gold Star
Joined: Jul 2007
Posts: 498
Ugh...just when I thought I had a handle on this Reg GG....I realize I really don't! This is really a silly question but one I must ask. Banks are required to identify and block illegal internet gambling transactions..I get how that will work with card systems. How are we to identify ACH/Wire activity?? Are we simply looking at the names? For example, a wire comes in from SlotsRUs...we flag that or am I missing the big picture here? Thank you!!!
Last edited by BSA Rookie; 10/21/09 04:54 PM.
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Operations Compliance
#1270708 - 10/21/09 05:06 PM Re: Reg GG-ACHs, Wires, etc. ComplianceGurl, CRCM
Hrothgar Geiger Offline
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Hrothgar Geiger
Joined: Jun 2005
Posts: 10,395
Jersey Shore
We maintain lists of gambling payment processors, and certain banks that service them (the Faroe Islands, anyone?).

Not a perfect solution, but then, what is?

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#1270713 - 10/21/09 05:07 PM Re: Reg GG-ACHs, Wires, etc. Hrothgar Geiger
ComplianceGurl, CRCM Offline
Gold Star
Joined: Jul 2007
Posts: 498
Thank you! I'll take that solution! :-) How can I get my hands on such a list?

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#1270718 - 10/21/09 05:09 PM Re: Reg GG-ACHs, Wires, etc. ComplianceGurl, CRCM
Elwood P. Dowd Offline
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Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
The supplementary information accompanying the regulation acknowledges that it is virtually impossible to identify and block gambling related transactions in process.

So, the regulation does not literally require you to monitor anything. It indulges in the fiction that by obtaining customer certifications and providing customer notices you have prohibited the transactions from taking place. Nevertheless, you must have procedures in place that dictate your actions if you trip over deposits related to illegal Internet gambling.

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#1270721 - 10/21/09 05:11 PM Re: Reg GG-ACHs, Wires, etc. Elwood P. Dowd
ComplianceGurl, CRCM Offline
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Joined: Jul 2007
Posts: 498
Oh..that's even easier!!! Thank you Ken, you've just made my day!!

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#1271339 - 10/22/09 01:53 PM Re: Reg GG-ACHs, Wires, etc. ComplianceGurl, CRCM
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,704
Cape Cod
Just remember, though. The transactions you are concerned with are "restricted transactions." By definition those are transactions involving illegal Internet gambling in which the funds are flowing to the business operating the illegal Internet gambling (IIG) enterprise. You only need to worry about incoming wire transfers and more particularly those benefiting such a business (and of course, if you are doing your due diligence correctly, you don't have any such customers, right?)

You don't have to block payments FROM a gambling operation to anyone (unless it's another gambling operations, I suppose). And you most definitely don't need to have any special Reg GG-specific monitoring procedure.

You do need to have a procedure designed to block card payments to an IIG business.
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BankersOnline.com
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#1272045 - 10/22/09 07:54 PM Re: Reg GG-ACHs, Wires, etc. John Burnett
zitch70 Offline
Gold Star
Joined: Apr 2001
Posts: 331
Edinburg, Texas
I have put together a document explaining our actions for complying with the reg. Here is what I put together for the last item in Ken Pegasus post of the 5 requirements of the reg for banks. This one is for W/T but also works with little modifications for ACH, Check clearing, Debit and Credit Cards.

At 12 CFR 233.6 the regulation gives some examples of procedures to be in compliance. The examples state that to be incompliance the bank must have: a) a due diligence process to determine risk; 2) methods to conduct due diligence in the event the bank has knowledge that an existing commercial customer engages in an Internet Gambling business; and 3) the bank has knowledge of the commercial customer has run some restricted transactions.

The bank has notified all current commercial business accounts as required by 12 CFR 233.6(b)(3) via a statement message; has a due diligence process in place for all new accounts opened as required by 12 CFR 233.6(b)(1); and has determined the risk of the commercial customer presents of engaging in an internet gambling business as required by 12. CFR 233.6(b)(2). Therefore we will only address the procedures specific for each designated payment system as shown in 12 CFR 223.3

Wire Transfer: Should the bank become aware of the business customer engaging in an internet gambling business or become aware of the business customer initiating or receiving restricted transactions through reports or other sources, the Senior Compliance Officer will be informed. Then the Senior Compliance Officer in conjunction with the Senior Operations Officer will make a determination if the business should be counseled or warned of the illegal activity, or the account closed. Also, the BSA officer will be informed of this action for the possible filing of a SAR.

This procedure has been communicated to the Wire Transfer Officer as a procedure to follow when personnel are reviewing any wire transfer requests or incoming wire transfer reports. This procedure also will be followed should the bank receive information that the business account is engaging in an Internet gambling business.

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