THE Bangko Sentral ng Pilipinas (BSP) is reminding BSP-Supervised Financial Institutions (BSFIs) to strengthen anti-money laundering (AML) and counter terrorism and proliferation financing (CTPF) measures for customers engaged in casino junket operations (CJO).
The central bank defined CJOs as ‘companies and persons who arrange gaming-related services for high-value patrons, including travel arrangements, credit extension, and gaming room bookings.’
In a guidance paper titled ‘Risk Management Practices for Customers Engaged in Casino Junket Operations,’ the BSP provides safeguards to prevent BSFIs from being used as channels for money laundering, terrorism financing, proliferation financing (i.e., funding the development and spread of weapons of mass destruction), and other illicit activities.
The guidance paper, the BSP said, identifies red flags associated with CJOs, such as unusual cash movements, complex ownership structures of corporate clients, and layered transactions.
Layered transactions, the BSP explained, refer to a series of fund transfers or financial activities that may ‘obscure the source, ownership, or movement of funds, making it more difficult to determine their underlying purpose or origin.’
BSP Deputy Governor for Financial Supervision Sector Lyn I. Javier emphasized that financial transactions linked to CJOs ‘can pose elevated money laundering risks.’
‘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,’ Javier emphasized.
The document recommends measures to strengthen risk management in five areas: board and senior management oversight; money laundering and terrorism financing prevention program; client acceptance and identification; ongoing monitoring and suspicious transaction reporting; and, self-assessment and training.
According to the BSP, the paper also highlights ‘existing good practices’ that the central bank suggests BSFIs maintain.
‘These include enhanced due diligence for high-risk clients, automated transaction monitoring, client link analysis, independent verification with regulatory agencies, and participation in information-sharing initiatives,’ the BSP noted.
The guidance paper is based on the BSP’s review of selected banks with exposure to CJOs and junket players’ transactions, the central bank said.