THE Anti-Money Laundering Council is looking at sifting through the activities of the casinos in the country, which it said could be used to funnel funds to finance acts of terrorism.

During Friday’s Congressional Oversight Committee hearing on the Anti-Money Laundering Act (Amla), a law passed in 2001, Vicente Aquino, AMLC executive director, said they are still baffled on how to do the task since the interagency body’s mandate is limited to the regulatory agency and not by type of activity.

Aquino said casino operations are not covered by AMLC’s scrutiny since the regulation falls under the Philippine Amusement and Gaming Corp., an agency under the Office of the President. Pagcor is both a regulator and operator of a number of gaming facilities in the country.

The AMLC only covers those institutions that are either supervised or regulated by the Bangko Sentral ng Pilipinas (BSP) for banks and other financial institutions, by the Securities and Exchange Commission (SEC) for all corporations and by the Insurance Commission (IC).

“It should be SEC or BSP (that should regulate casinos),” Aquino said, but stopped short of saying there should be amendments in the way casinos are regulated.

“Our definition of covered institutions is limited to both regulated or supervised by BSP, SEC or IC, and not by type of activity,” he said.

On September 22 to October 6, officials of the member-countries of the Financial Action Task Force (FATF), the World Bank-International Monetary Fund, will evaluate how the AMLC is doing its job of curbing the activities of money launderers.

The Paris-based task force has been explicit that Philippine casinos are potent areas of money laundering, and it wants a quick plug from council. It has also expressed impatience with the lack of an effective regulator, despite the Office of the President having taken over such responsibility.

Aquino said they may also change the way the council works—from covered institutions to type of activity—in order to meet standards, but this entails certain amendments to RA 9160, or the Amla.

Another chink in the council’s armor is that it is not yet clear if terrorist financing is a criminal act or not based on the definition of the Human Security Act of 2007, Aquino admitted.

“It is our position that the crime of terrorism is already covered by the act of terrorism…he may not have directly participated in the commission of the crime, but he induced others to commit acts of terrorism; his cooperation is indisposable,” he said.

The Philippines was first placed in the FATF’s list of noncooperative countries in 2000 and was only delisted in February 11, 2005, with a provision that there should be a plan of action on how to curb money laundering.

The list is not anymore active since most of the countries tagged noncompliant have followed the standards. FATF, however, is making itself relevant and updates its activities regularly, since the way money is funneled into several places across the world is evolving.   

In case of another round of sanctions after the FATF review later this year, the thing immediately at risk is the $14 billion that expatriate Filipinos remit every year, but it was not clear how this could be since the officials did not elaborate.

Sen. Edgardo Angara, chairman of the Committee on Banks, Financial Institutions and currencies, said the Office of the President, through the AMLC, has asked Congress to amend appropriate provisions in the law to remove the weaknesses noted by the FATF.

Angara noted FATF’s concern that Philippine casinos do not form part of the covered institutions under the Amla.

Money launderers merely have to walk inside casinos with millions of dollars in cash, pretend to play for a while and later walk away with a Pagcor check for deposit later in an overseas bank in Hong Kong, the FATF said.

No one questions a Pagcor check anywhere in the world and the money launderers have exploited this with impunity, according to industry sources.

Anti-money laundering officials believe, however, existing provisions already include casinos among the so-called covered institution the FATF has complained about.

But under Philippine law, the covered institutions only include those entities supervised by the BSP, the SEC and the IC, whose heads form the council. The casinos are not within the ambit of these institutions.

In other countries, the focus is on the type of activity rather than on who regulates what institutions, according to industry sources.

Angara, meanwhile, prodded officials of the council to immediately submit to Congress a proposal that would criminalize terrorist financing and freeze deposits linked to terrorist activities.

“We should create a stand-alone law on terrorist financing to enable [the council] to go after individuals and entities that finance terrorism and to strengthen the anti-money laundering legislation,” Angara said.

The Senate banks committee, Angara said, is committed to provide adequate funding to the AMLC through the 2009 national budget, a big chunk of which will be used to hire new analysts and investigators. (With Jun Vallecera, Butch Fernandez)

UnionBank will focus on consumer and corporate lending to get back on track and recover a 63-percent drop in net income for the first quarter the year.

THE policymaking Monetary Board may raise interest rates as early as next month in a move to curb consumer prices.

THE peso recovered its downtrend against the US dollar on Friday in what currency traders said is a “correction” after a week of depreciation.

THE Anti-Money Laundering Council is looking at sifting through the activities of the casinos in the country, which it said could be used to funnel funds to finance acts of terrorism.