AMLC sees decline in money laundering activities

The Philippines’ Anti-Money Laundering Council (AMLC) has observed a decline in money laundering activities after announcing a ban on Philippine offshore gaming operators (POGOs).

President Ferdinand Marcos Jr. announced the ban in response to concerns over the sector’s susceptibility to illicit activities.

In an official statement reported by Business World, the AMLC highlighted the high risk associated with the POGO sector, describing it as “highly vulnerable” to money laundering due to its internet-based operations.

In March 2020, the council conducted a risk assessment that identified these vulnerabilities, concluding that a comprehensive ban on POGOs could mitigate these risks. The council expressed optimism that the ban would reduce money laundering within the gaming industry.

The Philippines ranks among the top five Southeast Asian countries that experienced a significant rise in money laundering activities between 2018 and 2023.

Moody’s data indicates that money laundering incidents in the country increased by 45 percent from 2022 to 2023. The AMLC’s recent efforts to curb these activities through the POGO ban represent a critical step in addressing this trend.

While the POGO ban is expected to reduce money laundering risks, the AMLC clarified that the remaining concerns highlighted by the Financial Action Task Force (FATF) are unrelated to POGOs. Instead, these concerns focus on mitigating risks associated with junket operations in casinos. Junkets, often involving high rollers who travel to casinos for gambling, have been identified as another potential avenue for money laundering.

The FATF has kept the Philippines on its “grey list” of jurisdictions under increased monitoring for money laundering risks for three consecutive years, noting that the country has addressed 15 out of its 18 recommended action items. However, one of the remaining items involves demonstrating that anti-money laundering and counter-financing of terrorism (AML/CFT) controls effectively mitigate risks within casino junket operations.

To further combat money laundering, the AMLC emphasized the importance of implementing stringent AML/CFT controls in the gaming sector. These measures include fit and proper tests on junket operators, enhanced customer due diligence, and regular monitoring of transactions related to junket operations.

The council also urged gaming regulators to strengthen their compliance and enforcement efforts to ensure robust anti-money laundering practices. The POGO ban will eventually help the Philippines move away from the grey list of FATF.

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