AMLC report finds Phillipines Junket Operators Guilty of AML/CTF rules

The Phillipines’ Anti-money Laundering Council has released the report of the study it conducted into the junket sector of the country’s casino industry, especially in terms of suspicious transactions and terrorism financing. Findings from its analysis made the body conclude that the casino sector needs to put in place stronger procedures to combat money laundering and terrorism financing.

With The Phillipines being on the grey list of the Financial Action Task Force due to lax AML/CTF controls, the AMLC decided to launch an investigation into the casino sector. While the investigation uncovered several issues, one of the main discoveries of the investigation is the non-reporting of multiple transactions by casino junket operators.

The Phillipines casino sector permits junket operators who persuade high-rollers with incentives like all-expense paid accomodations just to get them to gamble at a partnering casino. But the agreement is that all transactions made while gambling must be reported to the casino.

However, the AMLC’s analysis revealed that junket operators have failed in complying with this procedure. The body gave an instance at an unnamed integrated resort where a junket operator repeatedly failed to file a suspicious transactions report despite such occuring even up to the tune of Php1.58 billion (US$29 million). This is asides several other instances of non-compliance by junket operators.

The body noted: “The heavy use of physical cash by casino players of covered and suspicious transactions by certain casino junket operators contributes to the [issue], coupled with the non-reporting vulnerability of high-risk integrated resorts to money laundering risks,”

This has made the AMLC note four key risk areas casino operators should watch out for as they deal with junkket operators. This includes violation of junket agreements; the involvement of junket operators in criminal conspiracy; the purchase of chips with small-denomination currency, followed by modest gambling actions; and conduct of financial transactions not commensurate with declared source of funds.

With Macau closing down junket operations in its casino sector, other countries are starting to take a hard look at how junkets operate and how to mitigate the risks.

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