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Rules out on casino coverage of AMLA

By Luis Leoncio

The rules to implement Republic Act 10927 which amended the Anti-Money Laundering Act of 2001 (AMLA) was signed among heads and key officials of the Anti-Money Laundering Council (AMLC), Philippine Amusement and Gaming Corporation (PAGCOR), Cagayan Export Zone Authority (CEZA) and Aurora Pacific Economic Zone and Freeport (APECO) in a ceremony held last Wednesday, October 25.

At the signing were AMLC officials led by Bangko Sentral ng Pilipinas (BSP) Governor and AMLC Chairman Nestor Espenilla Jr., Securities and Exchange Commission (SEC) Chair Teresita Herbosa and Insurance Commission (IC) Commissioner Dennis Funa, PAGCOR chairman Andrea Domingo; CEZA Director Arturo Bautista and APECO executive Israel Maducdoc led the officials of their respective regulatory agencies. Representing the AMLC Secretariat was Executive Director Mel Georgie Racela.

In a nutshell, the new implementing rules and regulations (IRR) requires casinos to put in place “sound risk management policies” to stem the flow of illicitly obtained cash..

This includes requiring all players to present valid identification cards before opening an account or redeeming casino chips into cash.

According to AMLC, casino should at least secure the customer’s name; date and place of birth; present address; permanent address; contact number or information; nationality; proof of identification and identification number; nature of work, name of employer, or nature of self-employment/business; and source of funds.

“Where an account is opened or a casino transaction is conducted by any person in behalf of another, the casinos shall establish and record the true and full identity and existence of both the account holder or transactor and the beneficial owner or person on whose behalf the casino transaction is being conducted,” the IRR read.

The AMLC prohibits casinos from engaging in any cash conversion without being used in gaming. Casinos are also not allowed to receive cash if its origin cannot be ascertained within a week.

“Casinos shall report to the AMLC all covered transactions and suspicious transactions within five (5) working days, unless the AMLC prescribes a different period not exceeding fifteen (15) working days, from the occurrence thereof,” according to AMLC. “Should a casino transaction be determined to be both a covered transaction and a suspicious transaction, it shall be reported as a suspicious transaction,” it added.

The casino law, as RA 10927 is popularly known, included casinos within the ambit of the AMLA, and requires casinos to identify and conduct due diligence on customers, keep records of transactions, and submit covered and suspicious transaction reports to the AMLC.

Just like banks, insurance companies and securities dealers, casinos’ compliance with the CIRRs will now be monitored by PAGCOR, CEZA and APECO with respect to their licensees and any such noted violations may be further referred to the AMLC.

As early as 2008, in the mutual evaluation of the Philippines, the Asia Pacific Group (APG) of Financial Intelligence Units (FIUs) found the country’s anti-money laundering policy deficient for the failure to include casinos within the AMLA.

The AMLC had lobbied intensely since then for the coverage of casinos under the AMLA.

In his opening remarks, Espenilla noted the enactment of the casino law and adoption of the CIRRs addressed deficiencies in the Philippines’ anti-money laundering regime, which until then, did not include casinos in the AMLA’s coverage.

He also called for cooperation and partnership between the AMLC and the three casino regulators to counter money laundering and financing of terrorism.

PAGCOR Chairman Domingo, meanwhile, welcomed the adoption of the implementing rules of the law as a continuation of PAGCOR’s efforts to match anti-money laundering rules in developed regions of the world.

She said PAGCOR had already adopted customer due diligence and suspicious activity monitoring.

However, she also emphasized the need for self-regulation among casinos and gaming operators. Notably, PAGCOR not only regulates but also operates casinos.

The basic framework, preparation and discussions of the draft rules, and technical training and formal signing were organized through the assistance of David Binns, head of the Asian Development Bank’s Office of Anticorruption and Integrity, and Atty. Jose Luis C. Syquia, Chief of the Due Diligence Unit of the same office.

Felons will have a more difficult time laundering dirty cash in Philippine casinos after the AMLA amendment.

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