BSP tells banks to tighten monitoring of casino junket clients over money laundering risks

The Bangko Sentral ng Pilipinas (BSP) has instructed Philippine financial institutions to strengthen scrutiny of customers engaged in casino junket operations (CJOs), citing unusual cash movements and complex ownership structures as risk indicators that require enhanced monitoring.

In a guidance paper released to the media on Tuesday, the central bank recommended stronger risk management measures, including enhanced due diligence, client link analysis, automated transaction monitoring, and the timely reporting of suspicious transactions.

The report, titled "Risk Management Practices for Customers Engaged in Casino Junket Operations," was based on the BSP's review of select banks with exposure to CJOs and junket players. It outlines best practices aimed at preventing money laundering and terrorism financing.

"Financial transactions linked to CJOs can pose elevated money laundering risks," BSP Deputy Governor Lyn Javier said in an emailed statement, stressing the need for BSP-supervised financial institutions (BSFIs) to strengthen their monitoring of suspicious transactions.

"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," she added.

Among the areas for improvement identified by the BSP is the need for BSFIs to establish specific risk management practices for CJOs, including identifying red flags and implementing transaction-level controls related to usual business declarations, hotspot locations, and the declared purpose stated in the articles of incorporation.

The BSP also called for bank-wide screening of adverse information related to scam hubs, taking into account typologies involving shared addresses with CJOs, as well as 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 said.

"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," it added.

BSP Governor Eli Remolona Jr. said in February that the Philippines is 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 surrounding flood control projects. —VBL, GMA News