Naguait: Banks are the real problem
Headlines that describe Philippine casinos as active conduits for money laundering have gotten the attention of the Philippines Amusement and Gaming Corp., the country’s regulatory body.
According to GGRAsia, PAGCOR “welcomed” a proposal to add casinos to the list of organizations covered by anti-money laundering law. But it expressed little confidence that the measure would stop the practice, because as PAGCOR CEO Cristino Naguiat said, “banks are the primary gatekeepers against illegal transactions.
“Laundering money in casinos is highly unlikely,” said Naguiat, “since converting illicit money into gaming chips would mean risking losses on the part of the perpetrator. Also, all the winnings in casinos are duly recorded by PAGCOR and can easily be accessed by the government.”
Recent reports suggest that the country may be a hotbed of money laundering, with casinos one portal for illicit transactions. In one case, millions of dollars allegedly stolen from a bank in Bangladesh ended up in Philippine casinos.
In the past, casinos were excluded from AML laws at the request of lawmakers as well as the regulator. Earlier this month, PAGCOR said it was investigating claims that at least three casinos in the country were used to launder money, including Bloomberry Resorts Corp.’s Solaire Resort & Casino and Melco Crown Philippines Resort Corp.’s City of Dreams Manila. According to a recent Bloomberg News report, about $100 million in funds were improperly funneled through the banking system and sent overseas; some of those funds were remitted to casino bank accounts, according to a statement from PAGCOR. The casinos have not been implicated in any criminal activity.
The Philippines is now on a “gray list” compiled by the global watchdog Financial Action Task Force, based in Paris, reports the Philippine Star. FATF has requested that casinos around the world set a $3,000 threshold for reportable transactions to better prevent money laundering and terrorist financing.
“In June 2013, the FATF determined that the Philippines had made significant progress in improving its AML/CFT regime and noted that the Philippines had established the legal and regulatory framework to meet its commitments in its FATF Action Plan,” said FATF Communications Manager Alexandra Wijmenga-Daniel. She added that the organization “raised concerns regarding the absence of AML/CFT measures for the casino sector.”
“Countries must require casinos to ensure that they are able to link customer due diligence information for a particular customer to the transactions that the customer conducts in the casino,” FATF said.
The Philippine Inquirer reports that Midas Hotel junket operator Kim Wong is set to appear before a Senate Blue Ribbon Committee this week to tell what he knows about an $81 million money laundering case at the Rizal Commercial Banking Corp. The money was reportedly stolen by Chinese hackers from the Bank of Bangladesh, and then entered the Philippines through an RCBC branch.
“You can be assured that banks that fail to perform their responsibilities will be held accountable,” said Bangko Sentral ng Pilipinas Deputy Governor Nestor Espenilla, in a message to Bloomberg News.
