U.S. govt report highlights AML deficiencies in Macau, Philippines

Wednesday 11th of April 2018

Proxy betting in Philippines and reporting thresholds in Macau have been identified as AML deficiencies as part of a U.S. government report released last month.

The report, named “2018 International Narcotics Control Strategy Report, Volume II: Money Laundering” was released in March from the Bureau of International Narcotics and Law Enforcement Affairs.

According to the report, its purpose is to provide a review of the AML legal and institutional infrastructure of each country or jurisdiction, and focuses on countries and jurisdictions affected by money laundering related to narcotics trafficking.

In Macau, the report stated that the presence of organized crime groups, including triads, have brought vulnerabilities to the region - which has the world’s largest gaming market by revenue.

“This inherent conflict of interest, together with the anonymity gained through the use of the junket operator in the transfer and commingling of funds, as well as the absence of currency and exchange controls, present vulnerabilities for money laundering,” said the report.

The Bureau found that the AML deficiencies came from the supplementary guidelines of the Gaming Inspection and Coordination Bureau, which has set the reporting threshold for transactions at $62,640. The Bureau says that Macau should lower the large transaction report threshold for casinos to $3,000 to bring it in line with international standards.

With respect to Philippines, the reports notes that while the Anti-Money Laundering Act (AMLA) now coves casinos, “ongoing deficiencies include the high ($100,000) single-transaction reporting threshold, the non-inclusion of junket operators as covered entities, and the exclusion of non-cash transactions for AML reporting purposes.”

The allowance of proxy betting, a practice that permits a gambler to place bets via telephone or the internet rather than going into a casino, is also a risk to AML efforts.

Furthermore, the dual role of the Philippine Amusement and Gaming Corporation as a licensor/ regulator and operator presents conflict-of-interest issues.

It did not mention the current privatization efforts of Pagcor for its owned casinos.