The Philippines will need to make further reforms to enhance its anti-money laundering (AML) and combatting the financing of terrorism (CFT) measures in relation to the country’s casino industry, says a report from the International Monetary Fund (IMF).
The fund said in a Friday press release that its executive board had reached the conclusion as part of its “Financial System Stability Assessment” of the country.
Referring to the country’s casino regulator, the Philippine Amusement and Gaming Corp (Pagcor), the report stated: “Pagcor should effectively apply risk mitigation and risk-based supervision measures (i.e., targeting casino junket operators).”
The document added, referring to the fact some casinos in the Philippines are in the public sector and under the umbrella of Pagcor: “The authorities should resolve Pagcor’s conflict of interest from its responsibilities for operating casinos and AML/CFT supervision.”
The IMF report said additionally the Philippines should strengthen “risk-based” AML/CFT supervision “including sanctioning procedures” for high-risk sectors, such as “banks, casinos, and money-value transfer service providers”.
The document also noted that the country currently faced “medium” risk to its reputation in terms of the financial sector.
The IMF suggested international confidence “could diminish from insufficient supervision and monitoring of casinos, the gaming industry, and cryptocurrency exchanges, which could be abused for financial crimes”.
Additionally, the fund said the Philippines’ “strict bank secrecy laws” limited financial supervisors’ access to individual depositors, and could “encourage criminals to misuse Philippine banks for fraud, money laundering, terrorism financing, and other financial crimes”.
Without further reform, reputational risk could “pressure” relationships with correspondent banks in other places, and “limit Philippine banks’ access to global markets, and affect the flow of international remittances, resulting in depreciation pressure on the Philippine peso,” stated the IMF.
In January, the Philippine Senate and the House of Representatives respectively approved amendments to the country’s Anti- Money Laundering Act, known as the AMLA, adding Philippine Offshore Gaming Operators (POGOs) and their “service providers” as “covered persons” under the legislation.
The lower house’s speaker was cited as saying the move would “help the Philippines avoid being included in the grey list of the FATF-International Cooperation Review Group”.
That was a reference to the France-based Financial Action Task Force, a body that advises countries across the world, on how to improve anti-money laundering procedures.
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