Philippine AML threshold for gaming operators too high?


philippine-anti-money-laundering-threshold-gamblingThe Philippines’ proposed threshold for casinos to report suspicious transactions is too high to satisfy international financial watchdogs, according to the head of the country’s stock exchange.

Last month, both chambers of the Philippine legislature unanimously approved plans to add the nation’s gambling operators – land-based, shipboard and online – to the definition of ‘covered persons’ under the Anti-Money Laundering Act (AMLA).

But the legislation only requires gaming operators to report individual transactions above P5m (US $100k) while non-gaming ‘covered persons’ had their threshold set at just P500k. This discrepancy could fail to impress international AML watchdogs, or so suggests Teresita Herbosa, chairperson of the Philippines Securities and Exchange Commission.

Herbosa, who also sits on the Philippines’ Anti-Money Laundering Council (AMLC), told the Philippine Star that the P5m figure “should be lowered if we really want stricter monitoring.” Not surprisingly, her view isn’t shared by the nation’s gaming operators, who have voiced their support for the new legislation’s moderate threshold.

Herbosa acknowledged her lack of familiarity with the gaming industry could be coloring her opinion of what threshold is appropriate, but warned that her view could be shared by the international Financial Action Task Force (FATF), which strongly criticized the omission of gaming operators under ‘covered persons’ when the AMLA was approved in 2013.

Legislators argued at the time that the omission was necessary in order not to impede the growth of the Philippine casino industry, which was only just expanding beyond the venues controlled by the Philippine Amusement and Gaming Corporation (PAGCOR).

The FATF threatened to put the Philippines on its AML naughty list, which would result in higher processing fees for local banks. This would negatively impact the vast army of overseas Filipino workers, whose annual remittances represented nearly 10% of the Philippines’ 2016 gross domestic product.

Philippine President Rodrigo Duterte has yet to sign the revised AMLA into law, and a congressional oversight committee could revise the transaction threshold for gaming operators before the bill reaches Duterte’s desk. The Asia Pacific Group on Money Laundering (APG) is set to meet next month, and the group has strongly urged the Philippines to get its AML house in order before then.