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FATF again urges the Philippines to boost junket controls

The Paris-based watchdog the Financial Action Task Force (FATF) has again said the Philippines must demonstrate the country is making use of anti-money laundering (AML) and combatting the financing of terrorism (CFT) controls “to mitigate risks associated with casino junkets”.

The recommendation was made in an update published by the FATF on Friday, regarding its ‘grey list’ of jurisdictions that it regards need increased monitoring in relation to risk of financial crimes.

The Philippines were added to the ‘grey list’ in June. At the time, the FATF said the country’s pledge of cooperation with the organisation included “demonstrating that supervisors are using AML/CFT controls to mitigate risks associated with casino junkets”.

The Philippines has a significant and growing casino and online gaming sector that in pre-pandemic times sought customers from across the Asia-Pacific region and beyond.

In its Friday release, the FATF acknowledged that, since June, the Philippines had “taken steps towards improving its AML/CFT regime”. But the FATF listed a total of eight areas where more should be done. That is according to an action plan previously presented by the Philippines’ authorities. Among the changes needed were controls to mitigate risks associated with casino junkets.

According to a research paper from the International Monetary Fund, published in May, a country’s addition to the FATF grey list can result in “large and statistically significant reduction in capital inflows”. Countries on the grey list need to submit progress reports to the FATF three times a year.

From 2000 until February 2005, the Philippines was on an FATF list of “non-compliant countries and territories” in relation to financial monitoring – also known as a “blacklist” – according to publicly available information from the FATF.

In January, the Philippine Senate and House of Representatives respectively approved amendments to the country’s Anti-Money Laundering Act, known as the AMLA, adding Philippine Offshore Gaming Operators (POGOs) and their “service providers” as “covered persons” under the legislation. One of the stated aims of that move was to avoid getting on the FATF’s grey list.

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