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Rules set to guard casinos vs dirty funds

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Casinos soon under dirty-money watch
Tourist and casino players arrive at the grand opening of the City of Dreams mega-casino in Manila on February 2, 2015. Six gleaming golden towers surrounding a giant egg-shaped dome opened as the Philippines' newest playground for the obscenely rich on February 2, dwarfing the capital's vast slums.

By Melissa Luz T. Lopez
Senior Reporter

CASINOS will now require all players to present valid identification cards and keep their gaming records as part of new rules to stem the flow of illicitly obtained funds.

The Anti-Money Laundering Council (AMLC) released last week the implementing rules and regulations (IRR) of Republic Act No. 10927, which formally placed gaming facilities under its watch.

The rules require casinos to set up formal customer identification processes and internal money laundering prevention programs, matching parallel know-your-customer standards imposed on banks, investment brokers and other financial institutions.

The IRR — published on Oct. 20 and which will take effect on Nov. 4 — covers all casinos operating in the Philippines, including Internet and ship-based gaming operations.

The AMLC drafted the IRR together with the Philippine Amusement and Gaming Corp., the Cagayan Economic Zone Authority and the Aurora Pacific Economic Zone and Freeport Authority.

All casinos must put in place “sound risk management policies” to monitor and check potential dirty money and terrorist financing arrangements, to be overseen by a compliance officer with the guidance of senior management.

“Casinos shall also provide a mechanism by which customers’ transactions and identification information will be continuously monitored and updated,” the 23-page IRR read.

They should also install a system that will enable them to understand the normal, reasonable account activity of their customers given the customer’s activities, risk profile and source of funds.

Casinos must “establish and record the true identity of their customers” by requiring identification documents before opening an account or redeeming casino chips into cash.

Operators should also conduct due diligence on players which includes ensuring that he/she has “full and physical control” on the bets placed on gaming tables.

At the very least, casinos should secure the name of the customer; nationality; date and place of birth; present and permanent address; contact number; proof of identification and identification card number; nature of work; name of employer or business; and source of funds.

“[N]o withdrawal or transfer of funds from the account of the customer shall be processed without conducting a face-to-face contact,” the rules state, although digital means may be used in specific cases.

Aliases for players are likewise banned: “Anonymous accounts and accounts under fictitious names shall be prohibited, and casinos shall maintain customers’ account only in the true and full name of the account owner or holder.”

Customer data and transaction records should be preserved by the casinos for at least five years, according to the implementing rules.

Casinos must also regularly report covered transactions — covering single cash transactions of at least P5-million each – as well as suspicious transactions, or those which appear out-of-pattern.

These reports must be submitted within five to 15 working days from date of discovery.

All casinos must sign up with the AMLC’s electronic reporting system within three months from the effectivity of the IRR.

The rules also mandate the AMLC to oversee the gaming sector, examine customer accounts, investigate and file charges.

Still-unidentified hackers stole $81 million from the Bangladesh central bank and transferred the funds to a Philippine bank and exploited loopholes in the Philippines’ anti-money laundering regime by using local casinos to launder the loot.

Authorities fast-tracked amendment of the law to finally include casinos among entities under the AMLC’s scrutiny, eventually getting the Philippines off the watch list of the Asia Pacific Group on Money Laundering for plugging the “structural gap” that has hounded the country for years.

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