Gold99 | Philippines’ Battle Against Money Laundering Challenges: The Casino Junket Factor
In 2021, the FATF included the Philippines in its list of nations with heightened scrutiny over anti-money laundering practices. Subsequently, the country committed to collaborating with the FATF to fortify its banking system and enhance financial regulations for businesses dealing with substantial cash transactions, particularly in the realm of casinos.
While progress has been evident, FATF authorities emphasize that more concerted efforts are required for the Philippines to extricate itself from the grey list. Spearheaded by the United States, United Kingdom, Japan, Germany, Canada, France, and Italy, this global organization contends that casino junkets, responsible for transporting high-stakes players from various parts of Asia to Philippine casinos and often extending loans equivalent to their lavish travel expenses, pose significant challenges related to money laundering.
Manila’s Entertainment City boasts four integrated casino resorts, namely Resorts World, City of Dreams, Solaire, and Okada. Additionally, there are casinos situated in the country’s freeport zones, and the Philippine government operates casinos under the Casino Filipino brand.
Advancements, Yet Challenges Persist
In the assessment conducted by the FATF since October 2023, the Philippines’ strides in aligning with international money laundering standards were acknowledged. While recognizing progress, the organization underscored the necessity for additional measures before the country can be delisted from the grey category.
Since committing to collaborate with the FATF in June 2021, the Philippines has actively undertaken initiatives to enhance the efficacy of its Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) framework. The country’s efforts encompass identifying and probing instances of terrorist financing, as highlighted by the FATF.
Addressing four specific areas demanding further enhancements, the FATF emphasized the need for the Philippines to showcase the utilization of AML/CFT controls by supervisors in mitigating risks linked to casino junkets.
Emerging as a favored operational market for junket groups post their expulsion from Macau by China, the Philippines witnesses these travel entities forming partnerships with casinos to manage VIP tables within secluded spaces.
President Ferdinand “Bongbong” Marcos Jr. has prioritized the removal of the Philippines from the FATF grey list during his tenure. In a proactive move last fall, Marcos issued directives to 44 government agencies, including PAGCOR (Philippines Amusement and Gaming Corporation), the regulatory body for casinos, urging them to undertake necessary measures for bolstering money laundering safeguards.
Significance of FATF Listing
Countries find themselves on the FATF grey list as part of a commitment to rectify inadequacies in their protocols related to money laundering and terrorist financing. Those lingering on the grey list face the potential shift to the organization’s blacklist, exposing them to sanctions and heightened reputational harm.
The continuous presence on the grey list frequently deters other nations from engaging in business partnerships. Moreover, such inclusion may result in the international business community avoiding the financial sector of a grey-listed country.
The FATF aims to facilitate the transition of nations from the grey list within a five-year timeframe. This underscores the organization’s dedication to fostering global compliance and combatting financial crimes effectively.
