IRR of law placing casinos under AMLA coverage out next month
THE PHILIPPINES is set to release next month the implementing rules and regulations (IRR) of a law that placed casinos under anti-money laundering watch, as institutions are urged to fill the gaps in their systems with the crackdown on dirty money gathering momentum.
Anti- Money Laundering Council ( AMLC) Executive Director Mel Georgie B. Racela said on Tuesday the financial intelligence unit will issue the IRR of Republic Act (RA) No. 10927 that requires casino operators to report to the agency for monitoring “one week before the deadline” set on Oct. 27.
“We’re now on page 3 of the page- by- page discussion. It’s a 21- page IRR,” Mr. Racela said during a seminar on anti-money laundering and combating the financing of terrorism organized by SGV & Co. in Makati City.
The AMLC is starting its preparation for the third mutual evaluation conducted by Asia-Pacific Group (APG) on Money Laundering — international watchdog Financial Action Task Force’s regional body tasked to monitor compliance of countries in the region.
“Between now and March, expect a lot of issuances from the AMLC Secretariat to address our deficiencies and this will include the casino implementing rules,” Mr. Racela said, referring to the March deadline for submission of the technical compliance update to the APG that will set in motion the mutual evaluation process.
“Apart from the IRR, we will be issuing guidelines for the casino operators. Because of the limited period we cannot deal more on the details of the IRR to avoid controversies and to expedite our discussion on the IRR. We can just issue guidelines after,” Mr. Racela said.
An on-site visit to confirm that the process of implementing the required reforms and actions is underway will take place between October to December 2018, with the adoption of the mutual evaluation report set in August to September 2019.
The upcoming mutual evaluation will result in an “increasing amount of regulation, circulation and evolving requirements coming in,” said Elizabeth MacDonald, senior manager at Ernst and Young Hong Kong.
“Now is the time to really ask for resources and look at your systems and processes, get the risk assessment done and try to get ahead of the game because there is regulatory momentum behind this that is the impetus for you to work ahead and match those requirements,” Ms. MacDonald said.
She noted that anti- money laundering is “top of mind in Asia,” where “cash is used more than anywhere else in the world.”
A bank and a remittance firm were involved in the $81-million cyber heist in February last year, which exploited gaping holes in the Philippines’ anti- money laundering regime by using local casinos in order to cleanse funds stolen from the Bangladesh central bank by still-unidentified hackers.
President Rodrigo R. Duterte signed on July 14 RA 10972 or “An Act Designating Casinos as Covered Persons under Republic Act No. 9160, otherwise known as the Anti-Money Laundering Act (AMLA) of 2001, as amended.”
The amendment was crucial to allow the Philippines to finally exit the APG watch list.
“The next step is taking us out of monitoring (then) we will be a regular citizen of the FATF,” Mr. Racela said.
The AMLC wants to adopt a proactive approach to evaluating financial transactions, with a plan to employ a data mining system that would collate and analyze financial data from reporting institutions.
“By acquiring the software, we will cut our analysis of financial transactions by 80% so we will have more time to conduct our proactive evaluation analysis,” Mr. Racela said.
As systems and data of institutions become the primary target of attacks, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Chuchi G. Fonacier stressed in the same event the need for “strong IT security and support, and close monitoring of transactions.”
“Foresight is necessary and financial institutions should anticipate what are the emerging risks based on their own analysis as well of data and transactions as well as external events to be able to design ways to prevent and mitigate those risks,” Ms. Fonacier said.
“In these days, it is not sufficient that an institution works alone. Collaboration is very critical,” the BSP official added.