Financial institutions in the Philippines are being urged to strengthen their monitoring of the casino sector to mitigate potential anti-money laundering and terrorism financing risks linked to junket operators.
The Bangko Sentral ng Pilipinas, the central bank, has issued a guidance paper highlighting the need for banks and other regulated financial institutions to improve and tighten their processes to manage risks from customers engaged in casino junket operations.
The central bank flagged challenges in client onboarding, citing the lack of open and comprehensive information available to banks to properly identify and manage risks tied to these clients.
Among the additional measures suggested by the central bank include conducting a separate risk assessment of junket operators and outlining specific risk management practices, such as identifying red flags like unusual cash patterns or the use of shell companies.
Banks are also required to strengthen their conduct of due diligence and enforce stricter evaluation of documents, including casino accreditation, approval from the Philippine Amusement and Gaming Corp., and junket agreements.
The central bank wants financial institutions to integrate procedures targeting junket operators in their testing and policy reviews, as well as conduct anti-money laundering training designed for junket-related matters.
The Philippine casino sector is under heightened threat of money laundering, especially in high-value transactions, cash activity, and VIP or junket relationships, according to the Philippine Amusement and Gaming Corp.'s latest anti-money laundering and counter-terrorism financing risk assessment.
Implementing tighter oversight of junket operators will make the Philippine financial system better equipped to face risks from the sector, the central bank said, emphasizing the importance of collective efforts to effectively address these challenges and risks.
Enhanced coordination and information sharing among supervising authorities, particularly the Philippine Amusement and Gaming Corp., the Bangko Sentral ng Pilipinas, and regulated financial institutions, is critical, the central bank added.
