A U.S. government report on international narcotics strategy has identified the casino industries of Macau and the Philippines as deficient in their anti-money laundering efforts.
The report, titled “2018 International Narcotics Control Strategy Report, Volume II: Money Laundering,” was released in March by the U.S. Bureau of International Narcotics and Law Enforcement Affairs.
The report provides a review of the AML legal and institutional infrastructure of each country or jurisdiction, and focuses on countries and jurisdictions affected by money laundering related to narcotics trafficking. For Macau, researchers identified the presence of organized crime triads as making the gaming center vulnerable to money laundering.
“This inherent conflict of interest, together with the anonymity gained through the use of the junket operators in the transfer and commingling of funds, as well as the absence of currency and exchange controls, present vulnerabilities for money laundering,” the report said.
The report concluded that the AML deficiencies came from the supplementary guidelines of the Gaming Inspection and Coordination Bureau, which has set the reporting threshold for transactions at $62,640. The bureau says Macau should lower the large transaction report threshold for casinos to $3,000 to bring it in line with international standards.
With respect to Philippines, the reports notes that while the Anti-Money Laundering Act (AMLA) now covers casinos, “ongoing deficiencies include the high ($100,000) single-transaction reporting threshold, the non-inclusion of junket operators as covered entities, and the exclusion of non-cash transactions for AML reporting purposes.”
The report also identified the dual identity of the Philippine Amusement and Gaming Corporation as a regulator and operator presents a conflict of interest.
The allowance of proxy betting, a practice that permits a gambler to place bets via telephone or the internet rather than going into a casino, is also a risk to AML efforts, the report said.
