NATIONAL AML/CFT STRATEGY

ACTION PLANS
and
MUTUAL EVALUATION
FINDINGS - CASINOS
Basic Anti-Money Laundering Foundation Course
Thunderbird Resort and Casino
October 3-4, 2019
 NATIONAL AML/CFT STRATEGY

Creation of
National Creation of 5
AML/CFT
Coordinating Sub-Committees
Committee under the NACC
(NACC)

Adoption of the
NACS by all
Approval of the
relevant
NACS
government
Executive agencies
Order No.
68
WHAT IS THE NATIONAL AML/CFT
STRATEGY (NACS)?
The NACS is a strategic and collective
response to the risks identified and provides
for a whole of government approach in
AML/CFT efforts.
It enables the government and the private
sector to have a coordinated and strategic
approach towards combating ML, its related
predicate offenses, terrorism and terrorist
financing in the country.
 NATIONAL RISK ASSESSMENT

ML/TF Risks – Sectoral Vulnerability

1st NRA 2011 - 2014 2nd NRA 2015 - 2016
SECTORS
BANKING SECTOR VULNERABILITY MEDIUM MEDIUM
SECURITIES SECTOR VULNERABILITY MEDIUM MEDIUM
INSURANCE SECTOR VULNERABILITY MEDIUM MEDIUM
MSBs MEDIUM HIGH
Pawnshops MEDIUM MEDIUM HIGH
OFI

NSSLAs (assessed based on MEDIUM

Lending & Finance products MEDIUM
E-Money Issuers MEDIUM
Casino VERY HIGH HIGH
Real Estate MEDIUM HIGH MEDIUM
Dealers in Precious Metals MEDIUM HIGH MEDIUM
DNFBP

Lawyers, Notaries MEDIUM MEDIUM

Accountants MEDIUM MEDIUM
Trusts MEDIUM LOW Assessed under Banking
Company Service Providers MEDIUM MEDIUM
Car Dealers MEDIUM HIGH MEDIUM
 NATIONAL AML/CFT STRATEGY

AML/CFT Legal Framework

ML/TF Intelligence Gathering

ML/TF Investigations and Prosecutions

Strategic
Objectives AML/CFT Supervision and compliance
(2018-2022)
Terrorism and Terrorist Financing threats

Domestic and International Coordination efforts

AML/CFT Awareness and AML knowledge

 NATIONAL AML/CFT STRATEGY

Development/update

Institutions and DNFBPs

Supervision of Financial
manual on risk-based
supervision

Capacity building for

Strategic AML.CFT supervisors
Objective 4
(2018-2022) Onsite & Offsite
examination (modules,
regulations, etc)

Environmental scanning
to identify new
businesses that may
need AML regulation
 Structure of the
National AML/CFT Coordinating Committee

NACC
AMLC as
Secretariat

Financial
Supervision Terrorism
Intelligence,
of Financing
Law Supervision AML/CFT
and
Enforcement Financial of DNFBPs Awareness
Proliferation
and Institutions Financing
Prosecution
 Philippine Amusement and
Gaming Corporation
Cagayan Economic Zone

S Aurora Pacific Economic Zone

D
Securities and Exchange
S Commission
C
Bangko Sentral ng Pilipinas

Anti-Money Laundering Council

Mutual Evaluations

A means of checking that

jurisdictions are meeting
and implementing the FATF
international standards
 SUPERVISION (IO 3) - MODERATE

Supervisors appropriately super vise, monitor and regulate

financial institutions and DNFBPs for compliance with
AML/CFT requirements commensurate with their risks.

 How well does the country prevent criminals and their associates
from owning or controlling FIs or DNFBPs?
 How well do the supervisors understand the risks?
 How well do supervisors supervise whether FIs and DNFBPs are
complying with their AML/CFT requirements?
 To what extent are remedial actions and/or sanctions applied?
 Can supervisors demonstrate that their actions af fect
compliance?
 Do supervisors promote FIs and DNFBPs understanding of risks?
 PREVENTIVE MEASURES (IO 4) -
MODERATE
Financial institutions and DNFBPs adequately apply AML/
CFT preventive measures commensurate with their risks, a
nd report suspicious transactions.

 How well do FIs and DNFBPs understand their risks and

obligations?
 How well do they apply mitigating measures?
 How well do they apply CDD and record‐keeping? Is business
refused?
 How well are specific measures applied? (e.g. PEPs,
correspondent banking, wire transfers rules, financial sanctions)
 How well do they meet their reporting obligations?
 How well do they apply internal controls?
 RISK AND COORDINATION (IO 1)

 Private sector stakeholders are aware of the results

of the NRAs, with the understanding and response
to risk more developed amongst FIs than DNFBPs.
Casinos have an awareness of transactional risks,
but awareness of ML/TF risks within other DNFBPs
in general is still developing.
 CASINO - SUPERVISION

 PAGCOR has a reasonable understanding of the risks,

particularly at the transaction level and has prohibited the
conduct of specific high risk transactions.
 Major risks to land-based casinos are junkets and proxy
betting. Information on risks of other national-owned casinos
was limited.
 Lack of recognition of the vulnerabilities related to junkets
role in the international movement of funds or risks posed by
of fshore illegal activities
 Impact on compliance has not yet reached the smaller market
participants, including PAGCOR -owned casinos
 Casinos which met with the assessment team displayed a lack
of clarity on the requirement for all financial transactions in
casinos to be subject to AML/CFT monitoring
 CASINOS – PREVENTIVE MEASURES

 PAGCOR has undertaken significant work to prepare casinos as

CPs, justifiably focusing on the large land-based casinos
 Larger, land-based casinos have made progress; smaller and
online casinos is developing:
 Casinos understanding of risk is developing; for online
casinos’, this is still at infancy.
 Large land-based casinos, esp IRs, have reasonable
understanding of a RBA; for online and any other casinos,
understanding and implementation is minimal.
 Larger casinos are modifying processes to comply with
CDD and record keeping requirements; for others and
online casinos, level of readiness is minimal
 Application of measures required for new technologies is
particularly relevant to the online casinos, but readiness
to comply is minimal
 CASINOS
TECHNICAL COMPLIANCE DEFICIENCIES
 CDD for occasional customers without an account is
required under PAGCOR CDD guideline for transactions
exceeding PHP500,000. The threshold is higher than
the FATF threshold of USD/EUR3,000
 There is no record keeping requirement for casinos to
obtain or to retain financial transactions conducted by
third parties to permit reconstruction of individual
transactions.
 No requirement for casinos to have outsourcing or
agency agreement with the junkets
 Does not account for country risk for third party
reliance
 CASINOS

PAGCOR has a (PA, IO3, IO 4) Not specifically

KEY FINDING

NACS ACTION PLAN

MER RECOMMENDED ACTION
has a conflict of PAGCOR should provided under
interest given its resolve its the NACS
ownership and conflict of
management of interest in its
its local casinos role as casino
operator and
AML/CFT
supervisor .
 CASINOS

Supervision of Ensure effective Not specifically

NACS ACTION PLAN

MER RECOMMENDED ACTION
KEY FINDING

casinos should risk mitigation provided under

include coverage and risk-based the NACS.
of their agents, supervision of
which is casinos, Related AP: SO
particularly including casino 4-1a. Develop
important noting agents (junket manual on risk
the high risk of operators). based
junket operators supervision and
Ensure casino examination
agents are (offsite & on-
captured in the site)
scope of its
examinations
 CASINOS

There are Extend AML/CFT Related AP: SO 4

KEY FINDING

NACS ACTION PLAN

MER RECOMMENDED ACTION
concerns reg controls directly – AP 28
casinos to casino junket Amendments to
outsourcing of operators, or AML/CFT
CDD to junket strictly enforce regulations of to
operators, given agency address evolving
the identified requirements to ML/TF risks
major risks ensure within their
posed by junkets appropriate sectors and to
and the fact agreements are harmonize it with
junket operators in place, and are international
are not subject to standards
regulated. adequate
supervision.
 CASINOS

PAGCOR has a Rectify TC Related AP: SO 4

KEY FINDING

NACS ACTION PLAN

MER RECOMMENDED ACTION
supervisory gap in deficiencies on – AP 28
covering all PACGOR’s record
financial Amendments to
keeping reqts AML/CFT
transactions of
casinos.
and sanctions for regulations of to
financial address evolving
CDD reqt for transactions not ML/TF risks
redemption of yet covered within their
chips or other under existing sectors and to
instruments, but guidelines harmonize it with
not all international
transactions in standards
casinos (e.g. buy-in
of chips).
 ALL DNFBPS

Early stages of Education and SO 4 – AP9.

KEY FINDING

NACS ACTION PLAN

MER RECOMMENDED ACTION
implementation assistance to to
of AML/CFT identify, Enhance
obligations; understand and
assess their ML/TF
AML/CFT
understanding of
risk is developing risks, implement outreach to
AML/CFT and
obligations; and to
Casino sector,
report CTRs/STRs. establish
made
considerable
Prioritized to 1) coordination
casinos, 2) jewelry
progress; Low dealers, 3) CSPs, mechanisms
number of AMLC and 4) law and
registration and accounting sectors
reporting (esp
online casinos)
 ALL DNFBPS

Lack of clarity Review legal Not specifically

KEY FINDING

NACS ACTION PLAN

MER RECOMMENDED ACTION
around the extent framework and
to which the AMLA conduct further provided under
applies to casino outreach the NACS.
operations affects
the sector’s Prioritized to 1)
Related AP: SO
understanding of casinos, 2) jewelry 4 – AP9.
its AML/CFT dealers, 3) CSPs, Enhance
obligations and 4) law and AML/CFT
accounting sectors outreach to
and establish
coordination
mechanisms
 ALL DNFBPS

PACGCOR does Improve market Related AP: SO 4

KEY FINDING

NACS ACTION PLAN

MER RECOMMENDED ACTION
not inquire into the entry controls – AP 28
underlying across all sectors
beneficial with deficiencies, Amendments to
ownership of and considering AML/CFT
casinos extending such regulations of to
controls to junket address evolving
Junket operators operators, to ML/TF risks
lack of market ensure criminals within their
entry reqts (altho and their sectors and to
not required by associates are harmonize it
FATF) prohibited from
ownership and with
management. international
standards
THANK YOU
jborja@amlc.gov.ph