Millions in illicit funds said to pass through country’s casinos
Teresita Herbosa, head of the Philippine Securities and Exchange Commission, has announced her support for a plan that would make casinos subject to the country’s anti-money laundering laws, reports the Philippine Standard. Herbosa is also co-chairperson of the Anti-Money Laundering Council.
“It’s a global effort to eradicate money laundering,” said Herbosa. “We have to catch up with people doing such activity, and while we are doing that, we need to strengthen the laws of each country to conform to best practices. I’m sure [casinos] will be considered for the next round of amendments.”
Herbosa was responding to inflammatory reports that the country may be a hotbed of money laundering, with casinos a chief portal for illicit transactions. In one case, millions of dollars allegedly stolen from a bank in Bangladesh ended up in Philippine casinos.
According to GGRAsia, casinos were excluded from AML laws at the request of certain lawmakers as well as the Philippine Amusement and Gaming Corp. (PAGCOR), the gaming regulatory body. Earlier this month, PAGCOR said it was investigating claims that at least three casinos in the country were used to launder money—but in a hearing on the matter, the regulator stood by its position that casinos should be exempt from AML laws.
“Making PAGCOR subject to the reportorial requirements under the anti-money laundering law will be seriously detrimental to its operations,” testified Concepcion Rubio, of PAGCOR’s legal department. “It will make PAGCOR even less competitive in the gaming industry and exacerbate its already tenuous position compared with other domestic gaming operators. As a result, PAGCOR’s ability to fund the many laws tasked by the legislature for it to support will be critically undermined.”
Rubio added that the Nevada Gaming Commission repealed anti-money laundering requirements from its regulations—a statement that prompted a clarification from Vicente Aquino, AMLC’s executive director.
“We take exception to the alleged nullification or withdrawal by the Nevada Gaming Commission. That has been superseded by the U.S. federal government,” he said. Aquino added that, unlike PAGCOR, the Nevada commission regulates but does not operate casinos. “That’s why there is probably no conflict of interest…and that basically is the difference between PAGCOR and the Nevada casinos.”
The regulator is investigating reports of possible money laundering involving three casinos, 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 in a matter of days; 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 World Casino Directory reports that the funds originated with “cyber-criminals hacking overseas accounts” who reportedly were based in China. Anonymous sources speaking to the Inquirer say the hackers included “at least three ranking government officials and four other bankers.”
Senator Serge Osmena told Bloomberg the laws in the Philippines are among the “weakest in the world.” And presidential candidate Senator Miriam Defensor Santiago also supports an expansion of AMLA coverage. “If the casino sector remains outside of the coverage of AMLA, the Philippines risks becoming the world’s money laundering capital,” said the People’s Reform Party candidate.
According to the Manila Times, Santiago has been acknowledged for her role in reforming the Commission on Immigration; in the late 1980s, it was known as the “fake passport capital of the world.”
For now, the Philippines remains on a “gray list” compiled by the global Financial Action Task Force. And the Wall Street Journal newspaper reports that AMLC is preparing charges against people allegedly involved in the Bangladesh case. “There is a clear violation of our anti-money-laundering law,” said council Chairman Amando Tetangco, who is also the governor of the Philippines’ central bank.
