Cambodia, Russia also on the list
The Philippines is getting some unwelcome publicity from the U.S. State Department, according to CalvinAyre.com. The website says the country ranks high on a list of jurisdictions that are vulnerable to money laundering operations.
The country joins five others in the Asia Pacific region with legal gaming industries that may have processed illegal transactions. The Philippine Daily Inquirer newspaper has alleged that three casinos in Manila’s Entertainment City were used to launder US$100 million stolen from an overseas bank by computer hackers.
“International experts and observers note that the Philippine casino industry is a weak link” in the country’s anti-money laundering and anti-terrorism regimes, the report says.
“Regionally, organized crime groups such as Chinese triads have infiltrated casino operations and have facilitated prostitution, narcotics trafficking, loan-sharking, and suspect junket and VIP gaming tours. Money laundering is a serious concern due to the Philippines’ international narcotics trade, high degree of corruption among government officials, trafficking in persons, and the high volume of remittances from Filipinos living abroad.”
Not surprisingly, Macau is also a destination of concern; the State Department has called for the Chinese territory to lower its definition of “large” reportable transactions to the equivalent of US$3,000, “to bring it in line with international standards.” Currently, Macau casinos are not legally required to report any transaction under MOP500,000 (US$62,511).
The government in the Chinese territory “should continue to strengthen inter-agency coordination to prevent money laundering in the gaming industry, especially by introducing robust oversight of junket operators and mandating due diligence for non-regulated gaming collaborators,” said the report.
The governments of Macau and Mainland China have recently indicated they would establish stricter control of cash transactions and the amounts transferred, CalvinAyre.com reported. But as brokerage Stanford C. Bernstein Ltd. noted earlier this month, “For Macau gaming, China’s closed, yet highly porous capital account is the life-blood of the industry (in particular the high-roller segments.”
Other Asia Pacific jurisdictions mentioned in the State Department report are Singapore, Cambodia, Russia and Australia. Singapore, though considered “the most stable and prominent financial center in Southeast Asia,” could be a target for criminals for that very reason. “Limited large currency reporting requirements and the size and growth of Singapore’s private banking and asset management sectors also pose inherent risks,” said the report. “Given the scale of the financial flows associated with the casinos, there are concerns that casinos could be targeted for money laundering purposes.”
Cambodia, meanwhile, has a “weak AML regime” with “outsized and inadequately-supervised banking and financial industries” and “porous borders.” And Russia is considered “a significant transit and destination country for international narcotics traffickers.”
Back in the Philippines, the Rizal Commercial Banking Corp., which has been implicated in the multimillion-dollar money laundering case, has denied involvement, according to the Philippine Star. RCBC Vice Chairman Cesar Virata said the bank does not do business with casinos.
And PAGCOR Chairman Cristino Naguiat said, “There are safeguards in place.”
