World Bank backs inclusion of casinos in AMLA

The World Bank ( WB) is strongly in favor of including casinos in the list of institutions covered by anti-money laundering laws.

WB lead economist and program leader Rogier van den Brink bared the institution’s position at a press conference yesterday during which he also urged government to initiate reforms in current money laundering and bank secrecy laws.

“Reforms should be made, for instance, in making sure that casinos are included in the covered institution list,” Van den Brink said.

He declined to comment on recommendations that real property and expensive jewelry also be included in the list.

The Financial Action Task Force (FATF), the international anti-money laundering watchdog, has been pushing the Philippine government to include casino operations in its list.

Any adverse reaction from the FATF, such as including the Philippines in a negative list, could result in higher cost of remitting cash by overseas Filipino workers. International trade and finance transactions would also be costlier.

Van den Brink warned of adverse consequences if the money laundering issue involving Bangladesh and the Rizal Commercial Banking Corp. (RCBC) leads to closure of bank accounts and restricts certain remittances.

“We really support the authorities’ calls for more legal reforms both in the AMLA Law and the bank secrecy laws because with those legal reforms it would be easier to do the money laundering client reviews and it would be easier to conduct the investigations,” he added.

WB-Philippine senior economist Karl Mark Chua said the global financial institution has a long-standing recommendation to the Philippine government that the latter institute reforms in its anti-money laundering campaign.

“We do not have to open bank secrecy totally but we can phase it and begin with cases or accounts wherein there is fraud. This is the practice all over the world,” Chua said. “Of course, there should be due process, but to have absolute secrecy until you die or until you give your consent, it would not be the best way.”

The recommendations include giving the Anti-Money Laundering Council (AMLC) more teeth.

The International Finance Corp. (IFC) earlier said it was closely watching developments locally and internationally.

Unnamed officials said negative sentiments toward the Philippines may damage its reputation, leading to less foreign direct investments (FDI). Lower FDI may stymie growth.

The World Bank stressed in the same briefing that reliance on remittances and the business process outsourcing (BPO) sector is not enough to sustain growth. WB stressed manufacturing is key to boosting growth rate, reducing poverty, increasing employment and raising revenues.

“And manufacturing needs FDI to fund its activities,” it added.

Cooperation

promised

Meanwhile, Solaire Resort and Casino and Midas Hotel and Casino are willing to cooperate with authorities in recovering the $81 million stolen from Bangladesh and allegedly laundered in Manila, Sen. Teofisto Guingona III said yesterday.

The two hotel-casinos are now trying to trace where the nearly P2 billion that they received out of the fund ended up.

But despite their willingness to cooperate, the two establishments have so far not offered to return whatever money they made from the almost P2 billion gambled in their casinos.

“So far, the return offers came only from casino junket operator Kim Wong and Philrem, the remittance company that exchanged the dollars into pesos,” he added.

A junket operator is one who recruits foreign gamblers to play in casinos here and Filipinos to gamble in casinos abroad.

Wong has returned $ 4.6 million and P38 million. He has offered to return a bigger amount – P450 million. He has admitted to receiving P1 billion, $5 million and an additional P400 million out of the $81 million.

Philrem has offered to return P10.4 million – its earnings from converting the Bangladeshi funds into pesos and delivering the money to Wong and his Chinese gambler-clients.

According to Wong, he deposited P550 million at Midas for his Chinese clients, who lost P510 million at the hotel casino.

Solaire officials have acknowledged getting $29 million ( P1.34 billion). Of that amount, they said they turned over P1 billion to two Macau nationals who are their junket operators. –