The U.S Department of State recently reported that five gaming regions in Asia-Pacific region have been identified by as being high-risk jurisdictions with regards to money laundering in their 2017 International Narcotics Control Strategy Report.
The five countries named are the Philippines, Cambodia, Laos, Malaysia and Russia. Last year’s inclusions Macau, Australia and Singapore have been omitted in the latest report. As in 2016 report, the Philippines has received the maximum criticism. It has pointed out that gaming venues in the country are still not covered by its Anti-Money Laundering (AML) Act, calling it the most pressing issue.
The legislation to address these issues in the Philippines is still pending.
According to media reports, the country’s upper legislative house has finally commenced considering measures to cover casinos under the AML Act. A Senate panel is said to be studying three different bills related to the matter. The report also highlighted that bank secrecy provisions in the country were among the toughest in the world, resulting in investigators often having to apply to court for approval to access records.
In a statement the U.S. State Department said,
This makes it difficult for the [country’s] AMLC [Anti-Money Laundering Council] to perform its basic financial analytical functions and inhibits the ability of law enforcement to proactively pursue money laundering cases in the absence of a link to a specific predicate crime.
The report pointed out to that Philippine casinos had been used to launder US$81 million of the funds heisted from Bangladesh’s central bank in 2016, and noted that action under the AML Act was limited to just 49 cases filed since it came into effect in 2001.
With regards to Cambodia, the U.S. State Department’s report said that its non-financial sector particularly gaming and real estate were largely unregulated, which was a cause for concern. It also highlighted that none of the 57 casinos located in Cambodia had sent in a cash or suspicious transaction report to the Cambodia Financial Intelligence Unit.
According to the report, money laundering was easy due to Laos’ cash-based economy and its authorities were ill-equipped to investigate. In Malaysia’s case, the U.S. State Department stated that while there was high level of adherence to international standards on money laundering controls, Malaysian authorities has so far preferred small fines instead of prosecuting those charged.
With respect to Russia, the report said that only a bare minimum of information was released by the country’s Federal Financial Monitoring Service. It also warned of changes in Russian law such as less stringent reporting rules that increased vulnerabilities in the system.