BSP Directs Banks to Enhance Monitoring of Casino Junket Clients Amid Money Laundering Risks

The Bangko Sentral ng Pilipinas (BSP) has instructed Philippine financial institutions to step up their monitoring of clients involved in casino junket operations (CJOs). This directive stems from concerns that unusual cash movements and complex ownership structures associated with CJOs can pose elevated money laundering risks. In a guidance paper released Tuesday, the central bank recommended stronger risk management measures. These include enhanced due diligence, analysis of client linkages, automated transaction monitoring, and the timely reporting of suspicious transactions. The report, titled "Risk Management Practices for Customers Engaged in Casino Junket Operations," is based on the BSP's review of select banks with exposure to CJOs and junket players. Its aim is to outline best practices for preventing money laundering and terrorism financing. "Financial transactions linked to CJOs can pose elevated money laundering risks," stated BSP Deputy Governor Lyn Javier in an emailed statement. She emphasized the necessity for BSP-supervised financial institutions (BSFIs) to bolster their monitoring of suspicious transactions. Javier added, "We identify the best practices and red flags BSFIs need to watch out for to be strong partners in our shared goal of curtailing crime and safeguarding the integrity of the financial system." The BSP identified areas for improvement, including the need for BSFIs to establish specific risk management practices for CJOs. This involves identifying red flags and implementing transaction-level controls related to usual business declarations, hotspot locations, and the declared purpose in articles of incorporation. The central bank also called for bank-wide screening for adverse information related to scam hubs, considering typologies involving shared addresses with CJOs, and improving the timeliness and effectiveness of CJO-related alert investigations. "It is important to take collective efforts to effectively address these challenges and risks associated with casino junket operations," the report stated. It further stressed that "Enhanced coordination and information sharing among supervising authorities, particularly PAGCOR, the BSP, and BSFIs, is critical, with supervisors playing a proactive role in guiding institutions, setting clear expectations, conducting targeted oversight, and providing feedback to strengthen risk mitigation measures." BSP Governor Eli Remolona Jr. had previously mentioned in February that the Philippines was working to avoid being placed back on the Financial Action Task Force's (FATF) anti-money laundering "grey list" of jurisdictions under increased monitoring, amid corruption concerns. This current directive appears to be part of those ongoing efforts. Information Source: GMA Money Philippines