Casinos’ inclusion in dirty-money surveillance alone not enough to keep PHL out of blacklist
THE RECENT INCLUSION of casinos under the watch of the Anti-Money Laundering Council (AMLC) does not automatically assure that the Philippines has completely cured its deficiency in curbing dirty money flows.
In a recent e- mail, international watchdog Financial Action Task Force (FATF) said the enactment earlier this month of Republic Act 10927 — which requires casinos to report to AMLC transactions worth at least P5 million — will be considered in upcoming assessments on the Philippines, even as the review will be system-wide.
The Philippines has been on the FATF’s “grey” list since 2012, averting the blacklist as the watchdog acknowledged the previous government’s “high- level political commitment” to plug loopholes in existing laws that allow illicit funds to flow through the country.
“The effectiveness of a country’s efforts can’t be determined by looking at one specific measure in isolation,” according to an e- mail from the office of FATF Executive Secretary David Lewis.
“Rather, during mutual evaluations, the assessment teams will look at the country’s entire legal, law enforcement and operational framework to protect the integrity of the financial system. They will also look for evidence that the action that the country has taken is delivering the right results,” the e-mail explained.
“In the case of the Philippines, the assessment team will determine whether the steps that the country has taken since their [ sic] last assessment have improved the effectiveness of their AML/ CFT (combating the financing of terrorism) framework.”
The FATF evaluation is conducted through the Asia/Pacific Group (APG) on Money Laundering, a regional body that counts the Philippines as a member.
The global body sets international standards for combating money laundering and terrorism financing, placing countries under any of three categories, namely: “grey list,” “dark grey list” and “black list.”
Blacklisting entails sanctions that would make financial transactions with the affected country expensive.
Gaps identified in the APG’s 2009 assessment report include the AMLC’s “limited authority” to directly access bank records, as well as the limited coverage of the law in requiring non-financial businesses and professions to report big-volume and suspicious transactions. AMLC’s limited resources to carry out its mandate of investigating and lodging criminal cases were also cited as a weaknesses. In particular, the APG said the exclusion of casinos raised “significant concerns” for efforts to curb dirty money flows, citing the big volumes that pass through gaming tables.
In early February 2016, Philippine casinos were used by still-unknown thieves to launder $81 million stolen from the Bangladesh central bank’s accounts with the Federal Reserve Bank of New York.
Of the amount that found its way into the Philippines, only about $15 million has so far been returned to Dhaka.
The new law signed by President Rodrigo R. Duterte on July 14 now counts casinos, including Internet and ship-based facilities, as institutions that should report covered amounts to the AMLC.
BSP Governor Nestor A. Espenilla, Jr. has said that the new law will “plug a critical gap” and should boost efforts to stop the entry and circulation in the country of illegally obtained funds.
In March, the US State Department tagged the Philippines as a “major” money laundering site in 2016 largely due to a “high degree of corruption” among public officials, human trafficking and its use as a venue for “drug transit” and transnational organized crime.