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US solons urge PH to plug casino money-laundering loophole

Rep. Stephen F. Lynch
Rep. Stephen F. Lynch (D-Boston)

WASHINGTON, D.C. The top Democrat in a House panel on terrorism financing led a bipartisan group of six congressmen in calling for the Philippines to tighten its anti-money laundering practices as a condition for joining the Trans-Pacific Partnership (TPP).

Rep. Stephen F. Lynch (D-Boston), the top Democrat on the House Financial Services Committee Task Force to Investigate Terrorism Financing questioned why the Philippines has not acted to plug the loophole in anti-money laundering laws that allow the unrestricted flow of money through the country’s casinos. 

A recent New York Times report called attention to deficiencies in the Philippines’ Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) regime. Since the gaming industry is not covered under AML/CFT law, funds are not able to be traced once they reach a casino.

The Financial Action Task Force (FATF), the international watchdog agency that sets international standards for anti-money laundering, has identified the loophole as something terrorist may exploit. 

“Our international anti-money laundering standards are a key tool in combating terrorist financing. The Philippines cannot continue to allow large sums of money to be transferred from their banking system to the gaming industry without the ability to track beneficiaries,” Lynch said in a statement.

The solons revealed their concern through a letter to US Treasury Sec. Jacob Lew. It was signed Financial Services Committee Ranking Member Maxine Waters (CA-43), Task Force to Investigate Terrorism Financing Chairman Mike Fitzpatrick (PA-08), Task Force to Investigate Terrorism Financing Vice Chair Robert Pittenger (NC-09), Rep. Keith Ellison (MN-05), Rep. Michael E. Capuano (MA-07), and Rep. Tom Emmer (MN-06).

The letter alluded to a Philippine Senate hearing on the $81 million theft of Bangladesh Central Bank money that was allegedly siphoned off through three Philippine casino operators. Since Philippine AML law does not cover casinos, the stolen funds can no longer be traced, the lawmakers said.

“The key to combatting money laundering is to ensure that governments can effectively follow the money trail to track and stop the flow of illicit funds,” they wrote.

They blamed the failure of government to plug the loophole to “extensive lobbying from the casino industry”.

 

 

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