Philippines remains graylisted by FAFT due to Casino Junket concerns

Posted on: March 8, 2022, 07:19h.

Last update: March 8, 2022, 7:19 a.m.

The Philippines will remain on a global money laundering “grey list” until it can mitigate the risks associated with casino junkets, the Financial Action Task Force (FATF) has said.

Philippine banknotes, pictured: The FATF said the country’s efforts to track dirty money were improving, but not enough to lose its greylist status. (Picture: The Business Times)

The Paris-based FATF is an intergovernmental organization founded by the G7 to combat money laundering and terrorist financing. A FATF gray list puts pressure on a country’s economy by hampering its banking sector, making it less nimble and more expensive to hire.

The FATF acknowledged on Friday that the Philippines has made progress in improving its anti-money laundering (AML) and countering the financing of terrorism (CTF) regime. But he identified several areas where such oversight could be improved.

In addition to strengthening controls over the junket industry, these include better supervision of designated non-financial businesses and professions, such as jewelry dealers, real estate brokers and developers, and service providers for financial companies.

Bank robbery in Bangladesh

The world’s attention was drawn to lax anti-money laundering controls in the Philippines following a bank robbery in Bangladesh five years ago.

In February 2016, hackers now suspected of working for North Korea flooded the New York Fed with requests to transfer nearly $1 billion from an account used by the government of Bangladesh.

Five of the 35 requested transactions were processed, amounting to approximately $101 million, before further payments were blocked.

Of these transactions, $20 million was traced to Sri Lanka and quickly recovered. The rest ended up in several bank accounts in the Philippines, which had been opened the same day under false names.

From there, with the help of several junket operators, it disappeared into the country’s casino industry. Most remain unrecovered.

Embarrassed to action

Prior to the pandemic, the country’s gaming sector was growing rapidly, spurred by improving relations with China and a visa-on-arrival policy for Chinese tourists. But Philippine lawmakers have been embarrassed by the bank heist in Bangladesh, which has drawn criticism from the World Bank.

In 2017, President Rodrigo Duterte signed legislation that introduced transaction reporting thresholds for the first time in the casino industry and gave authorities new powers to freeze funds if they were suspected of being involved. related to crime.

Previously, casinos were exempt from the Philippine Anti-Money Laundering Act of 2001, which was passed largely as a measure to avoid being blacklisted by the FATF.

Now officials have said online business world this week, they hope to be completely de-greylisted by January 2023.

Mel Georgie B. Racela, executive director of the Philippine Anti-Money Laundering Council, said the country’s gaming regulator, PAGCOR, was “currently identifying the risks posed by junket operations and would then implement the measures necessary to mitigate these risks”.

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