Philippine casino sector needs stronger AML controls, watchdog says

The Philippines remains on the Financial Action Task Force (FATF) “grey list”.
The Philippines remains on the Financial Action Task Force (FATF) “grey list”.

The Philippines’ Anti-Money Laundering Council has called for stronger anti-money laundering controls in the junket system.

The Philippines.- The Philippines’ Anti-Money Laundering Council (AMLC) has issued a report highlighting the “inherent vulnerability” of the junket system in the casino sector to money laundering and terrorism financing risks. It found that players’ use of physical cash and some junket operators’ non-reporting of suspicious transactions contributed to the vulnerability of high-risk integrated resorts

The report analysed over 7,400 suspicious transaction reports related to casino junkets and identified four notable types of activity that could be linked to either money laundering or terrorism financing: junkets’ non-reporting of transactions to casino operators, involvement in criminal conspiracy, purchase of chips with small-denomination currency followed by modest gambling actions and conduct of financial transactions not commensurate with declared sources of funds. to money-laundering risks.

The AMLC used two sets of data for its analysis. The first comprised 3,308 suspicious transaction reports filed by various institutions between September 2018 and January 2023, containing the keyword ‘junket’ in the narrative field. These transactions had an aggregate value of PHP17.79bn (US$325.8m). 

The second set included 4,110 suspicious transaction reports filed from December 2021 to September 2022 by the four integrated resorts in the Philippines labelled by the local authorities as having the “highest risk” for money laundering or terrorism financing. The names of the four properties were not disclosed. This sample comprised transactions with an aggregate value of PHP17.59bn.

In February, the Financial Action Task Force (FATF) decided to keep the Philippines on its “grey list” of untrustworthy jurisdictions. The anti-money laundering compliance watchdog acknowledged the Philippines‘ high-level political commitment to work with the FATF and the Asia/Pacific Group on Money Laundering (APG) to improve the effectiveness of its AML measures. However, it said the Philippines must continue implementing its action plan to address strategic deficiencies. 

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