Curacao Is the Most Popular Jurisdiction Among Operators Because Of Its Affordability: Tetiana Klymenko, Head of Legal Department at Law & Trust International

Curacao Is the Most Popular Jurisdiction Among Operators Because Of Its Affordability: Tetiana Klymenko, Head of Legal Department at Law & Trust International

In an interview with Kyiv iGaming Affiliate Conference, Tetiana Klymenko, the Head of Legal Department at Law & Trust International, talks about the challenges faced by operators during licensing and efficient systems for gambling business monitoring.

Tetiana Klymenko is an experienced international lawyer and a specialist in gambling payment solutions. She provides licensing services as well as focuses on tax structuring and development of international holding structures in the gambling industry.

Interviewer: Kyiv iGaming Affiliate Conference (KiAC)

Respondent: Tetiana Klymenko (T.K.)

KiAC: Tell us about Law & Trust International. What are your obligations there?

T.K.: Law & Trust International was founded in 2003. It is an international law firm engaged in tax and consulting services, business registration and support, certification, accounting and audits, real property processing, etc.

The company operated in Europe, the USA, Australia, and the Pacific Islands, as well as in Asia and Africa. Its offices are based in Ukraine, the UK, the USA, Russia, Georgia, and Cyprus. I work at the Ukrainian office and lead one of the legal departments. I am responsible for managing customers’ projects and performing administrative functions as the head of the department.

KiAC: Your company licenses gambling businesses in 12 countries. What jurisdictions are the most popular among clients?

T.K.: Curacao is the most popular jurisdiction among operators because of its affordability. Malta and the Isle of Man can be also mentioned here.

KiAC: What major differences do operators face when licensing gambling businesses?

T.K.: The core problem is account opening. Many countries define gambling as a very risky activity, thus banks or other financial institutions are not ready to accept gambling operators even if they have licenses.

The second issue is software certification and regulators’ concerns about software providing equal odds of winning to both operators and players.

The third challenge is compliance with anti-money laundering legislation. As foreign practice shows, a substantial share of money laundering operations is conducted via casinos.

KiAC: Does licensing guarantee the transparency of financial and tax activities of operators?

T.K.: Licensing raises requirements for operators. Operators voluntarily reveal the corporate structure, management, and other internal features, including legal acts regulating the labor activity of employees.

Licensing means the statutory monitoring on behalf of the public authorities as well as the responsibility for certain violations that can be committed by operators.

Nevertheless, even despite the licensing procedure completed by operators to obtain the right to work in the gambling sector, some individuals can somehow get around or break the law in order to increase their profit. Licensing sets up significant barriers on the way of such people.

KiAC: How to control this aspect and what measures are taken in different countries? What should be adopted in developing Ukrainian monitoring systems?

T.K.: I can stress the top 10 measures proved to be efficient abroad and appropriate to Ukraine.

  1. Establishment of public ledgers of ultimate beneficiaries.

  2. Setting requirements for directors.

  3. Determination of requirements concerning the trustworthiness of shareholders (previously unconvicted, not engaged in any financial scandals/fraud schemes, etc.).

  4. Placement of servers within the country granting a license.

  5. Division of licensing into B2C (carrying out gambling activities only) and B2B (servicing B2C companies, including the development and maintenance of software).

  6. Tightened currency control over operators to prevent withdrawals abroad.

  7. Development of enhanced anti-money laundering measures. For instance, a requirement to appoint an independent AML officer who will be responsible for the detection of AML legislation violations.

  8. Introduction of the obligation to publish reporting and information about controlling persons, corporate structure, and directors.

  9. Adoption of the obligatory audit.

  10. Implementation of monthly inspections.

KiAC: What countries do you think have the most reliable systems for controlling financial and tax activities of operators?

T.K.: The USA, the UK, Germany, Norway, and the Netherlands.

KiAC: What will you talk about at the conference?

T.K.: I will analyze monitoring systems of financial and tax operations in countries where the gambling business is developed most of all. I will talk about tax liabilities control by authorized bodies and requirements that should be fulfilled by operators.

Besides, I will reveal where to open accounts to provide tax liabilities control and will focus on the conditions of establishing a pay-off reserve fund for players. It should store money as well as set up mechanisms of its pay-offs and guarantees for players. By the way, the state is in charge of protecting these funds.

Tetiana will speak at KiAC on December 18. Details about her presentation can be found here>>>

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