Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Sixteenth Congress
First Regular Session

HOUSE BILL No,_3876

Introduced by Hon. Nelson “Sonny” P. Collantes

EXPLANATORY NOTE

Next to taxes, revenues from the casino sector are among the major sources of income
of the government. It must be recognized that the casino and gaming industry, under the
supervision and regulation of the Philippine Amusement and Gaming Corporation, has been a
strong and responsible partner of the government in pursuing its development plans.

However, the casino sector is equally exposed to the raging threats of money
laundering and financing of terrorism (ML/FT). Its vulnerabilities to criminal exploitation
can be attributed to the fact that casinos are cash intensive businesses with high volumes of
large cash transactions taking place very quickly; that they also offer many financial services
such as remittance, cash issuing and foreign exchange; that the movement of funds, either
internationally or domestically undertaken, associated with gaming-related tourism is poorly
understood and may pose money laundering threats; and, that the casino indust
unregulated for anti-money laundering/combating the financing of terrorism (AML/CFT)
purposes, With these identified vulnerabilities, the casino industry appears to be attractive in
successfully undertaking money laundering activities.

On this note, it is highly imperative to establish an AML/CFT regulatory framework
that would preserve the integrity of the gaming industry and protect it from the evils of
ML/FT.

Under the FATE! Recommendations, the international standards on combating money
laundering and the financing of terrorism and proliferation, casinos is one of the identified
non-financial businesses vulnerable to the threats of ML/FT.Hence, casinos must be regulated
for AMLICFT purposes and be subjected to the requirements set out in the Recommendations
particularly on customer due diligence, record-keeping and reporting of transactions. ‘These
requirements are the internationally-accepted preventive measures in combating ML/FT.

1 Financial Action ‘Task Force (FATR) is an inter-governmental body established in 1989 by the Ministers of its
Member jurisdictions (G7 countries such as Canada, France, Germany, Italy, Japan, UK and USA). ‘The objectives
of the FATF are to set standards and promote effective implementation of legal, regulatory and operational
measuces for combating money laundering, terrorist financing and other related threats to the integrity of the
international financial system,



After the assessment of the Philippines’ AML/CFT Regime in 2008, which was
jointly conducted by the World Bank and the Asia Pacific Group on Money Laundering
(APG), one of the recommended action plans by the assessment team in order to improve our
country’s AMLICFT system was to ensure that the casino sector is made subject to a
comprehensive regulatory and supervisory regimeas soon as possible.

Likewise, it must be noted that during the FATF meetings in June 2013 held in Oslo,
Norway, members of the FATF noted the recent enactment of Republic Act No. 10168",
Republic Act No. 10167, and Republic Act No. 10365" by the Philippine Congress. These
important developments were the basis for the decision of the FATF to remove the
Philippines from the list of jurisdictions that are subject to FATF’s monitoring process under
its on-going global AML/CFT compliance process. This development spared the Philippines
from the possible imposition of countermeasures from other jurisdictions. However, in the
same meeting, the Philippines was vehemently urged to work with the APG as it continues to
address the full range of AML/CFT issues identified in its Mutual Evaluation Report, in
particular, in regulating the casino sector in the Philippines for AML/CFT purposes and
making it subject to AML/CFT requirements,

In view of the foregoing, the immediate approval of this bill is earnestly sought.

Now ? Cite

NELSON “SONNY” P. COLLANTES

2 “an Act Defining the Crime of Financing of Terrorism, Providing Penalties Therefor and for Other Purposes”
» san Act To Further Strengthen the Anti-Money Laundering Law, Amending forthe Purpose Sections 10 and 11 of Republic Act No. 9160
COthenwize Knovin as the ‘Anti-Money Laundering Act of 2001, As Amended, and for Other Purposes”

‘an Act Further Strengthening the Anti-Money Laundering Law, Amending for the Purpose Republic Act No. 9160, Otherwise Known as
‘the “Anti-Money Laundering Act of 2001’ as Amended”


Republic of the Philippines

Quezon City, Metro Manila

Sixteenth Congress
First Regular Session

HOUSE BILL No. _8876_

Introduced by Hon, Nelson “Sonny” P. Collantes

AN ACT DESIGNATING CASINO OPERATORS AS COVERED PERSONS UNDER’
REPUBLIC ACT NO. 9160 (ANTI-MO) AUNDERING ACT OF 2001), AS
AMENDED, FOR THE PURPOSE OF STRENGTHENING THE ANTI-MONEY
LAUNDERING/ COMBATING THE FINANCING OF TERRORISM REGIME OF
THE PHILIPPINES, AND FOR OTHER PURPOSES.

Be it enacted by the Senate and the House of Representatives of the Philippines in Congress
assembled:

Section 1. Short Title—This Act shall be known as the "CASINO AML/CFT ACT
OF 2014."

Section 2. Declaration of Policy. ~ It is hereby declared the policy of the State to
censure that the Philippines shall not be used as a site for the laundering of the proceeds of any
unlawful activity and for the financing of terrorism. To this end, it shall protect and preserve
the integrity ofthecasinoindustry with a strong and efficient Anti-Money Laundering /
Combating the Financing of Terrorism (AML/CFT) regime. Consistent with its foreign
policy, the State shall extend cooperation in transnational investigations and prosecutions of
persons involved in money laundering and terrorist financing activities wherever committed,

Section 3. Designation of Casino Operators.-Casino operators, with respect to their
‘gaming operations, are hereby designated as covered persons under Republic Act No. 9160,
“otherwise known as the Anti-Money Laundering Act of 2001, as amended.

Section 4. Definition of Terms For purposes of this Act, the following terms are
hereby defined as follows:


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(A) ACCOUNT - shall refer to membership account, customer’s credit account, check
cashing account, deposit account or any other account opened with a casino by or
on behalf of a customer.

(B) AGGREGATION - shall refer to multiple or series of transactions that are treated
as a single cash transaction if done by or on behalf of a specificcustomer
involvingan amount exceedingthe designated threshold in one (1) trading day.

(©) CASH — means currency notes and coins considered as legal tender in the country
of issue,

(D)CHECK IN - shall mean transactions involving the receipt of cash by a casino
paid by or on behalf of a customer. These include, but are not limited to the
following:

1) Purchases of chips, tokens, and other gaming instruments;

2) Front money deposits;

3) Safekeeping deposits;

4) Payments on any form of credit, including markers and counter checks;

5) Currency received by a casino for transmittal of funds through wire
transfer for a customer;

6) Purchases of a casino's check;

7) Exchanges of currency for currency, including foreign currency; and

8) Bills inserted into electronic gaming devices.

(E) CHECK-OUT -shall mean transactions involving the payout of cash by a casino
to a customer or to any person in his behalf, These include, but are not limited to
the following:

1) Redemptions of chips, tokens, tickets, and other gaming instruments;

2) Front money withdrawals;

3) Safekeeping withdrawals;

4) Advances on any form of eredit, including markers and counter checks;

5) Payments by a casino to a customer based on receipt of funds through wire
transfers;

6) Cashing of checks or other negotiable instruments;

7), Exchanges of currency for currency, including foreign currency;

8) Travel and complimentary expenses and gaming incentives; and

9) Payment for tournament, contests, and other promotions.

(F) CASINO = shall refer to gambling casinos where the building, room or space is
used for social amusements; specifically, one used for gambling through games of
chance, games of cards and games of numbers and are being regulated and
supervised by the Philippine Amusement and Gaming Corporation (PAGCOR),
the Cagayan Economic Zone Authority (CEZA) or any other appropriate
supervising authority. For purposes of this Act, it also includes internet- and ship-
based casinos.

1) Internet-Based Casino -shall refer to gambling casinos in which persons
participate by the use of remote communication facilities such as, but not
limited to, internet, telephone, television, radio or any other kind of
electronic or other technology for facilitating communication.


Codd duaens

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2) Ship-Based Casino -shall refer to gambling casinos, the operation of which
is undertaken on board a vessel, ship, boat or any other water-based craft
wholly or partly intended for gambling.

(G)COVERED TRANSACTION — Notwithstanding the provision of Section 3(b) of
Republic Act No, 9160, as amended, for purposes of casino-related transactions,
covered transaction shall refer to a single or an aggregate oftransactions
undertaken by anyindividual with the casino involving an amount in excess of
‘Three million pesos (Php3,000,000.00).

(H) CUSTOMER - shall refer to any person who transacts or attempts to transact with
a casino, whether or not that person participates, or intends to participate, in the
gaming activities offered by the casino.

(). MONETARY INSTRUMENT shall refer to:

1) Coins or currency of legal tender in the Philippines, or in any other
country;

2) Casino Value instruments such as casino chips, casino reward cards,
Ticket ‘icket out, markers, cashier’s order, chip purchase order, chip
check, gift certificates, casino draft;

3) Negotiable checks such as casino check, personal check, bank draft; and

4) Other similar instruments where title thereto passes to another by
endorsement, assignment or delivery.

() MONEY LAUNDERING ~ shall refer to acts punished under Section 4 of
Republic Act No, 9160, as amended.

(K)OFFENDER-shall refer to any person who commits money laundering offense
and/or terrorist financing.

(L) PERSON-shall refer to any natural or juridical person,

(M) PROCEEDS-shall refer to an amount derived or realized from an unlawful

activity. Itincludes

1) All material results, profits, effects and any amount realized from any
unlawful activity;

2) All monetary, financial or economic means, devices, documents, papers or
things used in, or having any relation to, any unlawful activity; and

3) All. moneys, expenditures, payments, disbursements, costs, outlays,
charges, accounts, refunds and other similar items for the financing,
operations, and maintenance of any unlawful activity.

(N)PROPERTY-shall refer to anything or item of value, real or personal, movable or
immovable, tangible or intangible, or any interest therein or any benefit, privilege,
claim or right with respect thereto.


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(O)SUPERVISING AUTHORITY-shall refer to the PAGCOR, CEZA or any other
appropriate agency, as may be determined by law.

(P) SUSPICIOUS TRANSACTIONis a transaction, regardless of the amount
involved, where any of the following circumstances exists:

1). The casino operator or any of its employees knows, suspects, has reason to
suspect, or should have known, by the exercise of due diligence, that the
transaction:

a, Involves funds derived from an unlawful activity or from a money
laundering offense;

b. Is designed to evade any of the requirements under this Act or of
Republic Act No, 9160, as amended;

¢. Has no business or apparent lawful purpose or is not the sort in which
the particular customer would normally be expected to engage, and the
casino operator or any of its employees knows of no reasonable
explanation for the transaction after examining the available facts,
including the background and possible purpose of the transaction; or

d. Involves the use of casinos to facilitate unlawful activity, money
laundering and/or terrorist financing,

2) Any of the circumstances for the filing of Suspicious Transaction Report
under Sec, 3 (b-1) of R.A. 9160, as amended.

3) And any other circumstances that may be determined suspicious by the
Anti-Money Laundering Council (AMLC).

(Q)TERRORIST FINANCING = shall refer to acts defined and punished under
Sections 4, 5, 6, 7 and 8 of Republic Act No. 10168.

(R) TRADING DAY = refers to the normal business day of a casino. If the casino
offers 24-hour gaming, the term shall mean that 24-hour period by which the
casino keeps its books and records for business and accounting purposes.

(S) TRANSACTION-means purchase or redemption of casino chips or tokens, or
other gaming instruments or any other payment, transfer, or delivery by, through,
or to a casino, by whatever means effected.

For purposes of reporting Covered Transactions, cash transaction shall mean the
physical transfer of cashfrom one person to another. A non-cash transaction, on
the other hand, shall mean the transfer of funds by means of bank check, bank
draft, wire transfer, or other written order.

(1) UNLAWFUL ACTIVITIES — shall refer to the crimes or offenses listed under
Section 3 (i) of Republic Act No. 9160, as amended.

Section 5. Prevention of Money Laundering; Customer Identification Requirements
and Record Keeping. —


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(A) Customer Identification, - Casino operators shall:

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Based on official documents, establish and record the true and full identity
of their customers engaging in a single or an aggregate transaction in
excess of Two hundred thousand pesos (Php200,000.00).

Maintain a system of verifying the trueand fullidentity of their customers
and, in case of corporate customers, require a system of verifying their
egal existence and organizational or control structure, as well as the
authority and identification of all persons purporting to act on their behalf.
Take reasonable measures to obtain information sufficient to identify and
verify the identity of every beneficial owner of the customer’s account.

Develop clear, written and graduated customer acceptance policies and
procedures including a set of criteria for customers that are likely to pose
different levels of risk to their operations, as well as the standards in
applying the appropriate degree of due diligence, including a set of
conditions for the denial of account opening.

Based on the assessment of risk, endeavor to identify Politically Exposed
Persons(PEPs) and shall apply enhanced customer due diligence.

Based on the assessment of risk, continually monitor the transactions in
each of its customer's accounts to ascertain whether the transactions are
consistent with the casino operator's knowledge of the customer, his
income profile and his source or sources of funds.

Periodically review the adequacy of information they have obtained in
respect of customers and beneficial owners of customer's account and
ensure that the information is kept current, particularly for categories of
customers that the casinos may assess to present higher risk of money
laundering and terrorism financing.

The provisions of existing laws to the contrary notwithstanding, anonymous

accounts, accounts under fict

jous names, and all other similar accounts shall be

absolutely prohibited.

(B)Record Keeping — All records of all transactions of customers shall be maintained
and safely stored for at least five (5) years from the date of the last transaction,
unless the casino operator is required in writing by the AMLC to retain the records
for a longer period, due to a pending judicial action relevant to the records.

(CReporting of Covered and Suspicious Transactions —

1)

2)

Casino operators shall report all covered transactions and suspicious
transactions to the AMLCin a manner and within the period prescribed
under Republic Act No. 9160, as amended.

Should a transaction be determined to be both a covered transaction and a
suspicious transaction, it shall be reported as a suspicious transaction,


CeId dH aon

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engaging in the following transactions or activitie

3) Notwithstanding the preceding paragraphs, casino operators are exempted
from reporting the following covered transactions —

i, Check-out transactions fo the extent the currency is won in a money
play and is the same currency the customer wagered in the money play,
or check in transactions to the extent the currency is the same currency
the customer previously wagered in a money play on the same table
game without leaving the tables,

ii, Jackpot winnings from slot machine; and

iii, Other covered transactions that may be determined by the AMLC.

(D) Confidenti

ity of Reports~

When reporting covered or suspicious transactions to the AMLC, casino
operators and their officers and employees are prohibited from communicating,
directly or indirectly, in any manner or by any means, to any person or entity,
including the media, the fact that a covered or suspicious transaction has been
reported or is about to be reported, the contents of the report, or any other information
in relation thereto. Neither may such reporting be published or aired in any manner or
form by the mass media, electronic mail, or other similar devices. In case of violation
thereof, the concerned officer and employee of the casinos and media shall be held
criminally liable,

Casino operators, including any of its officers and employees, may not be
compelled, by subpoena or otherwise, to disclose a Suspicious Transaction Report, or
disclose the fact that a Suspicious Transaction Report was filed or is about to be filed,
or disclose any information contained in or in relation to a Suspicious Transaction
Report. This, however, is without prejudice to theexercise of the supervising
authority of its supervisory or regulatory powers under its charter,

‘The AMLC, PAGCOR, CEZA, or any government or prosecutorial agency
shall not be compelled to identify or name, in any manner or in any venue, any casino
as the source of information about any person or entity that probably committed
money laundering offense, terrorist financing or any other offense or violation under
this Act or Republic Act No, 9160, as amended.

(B) Safe Harbor Provision -

No administrative, criminal or civil proceedingshall lie against any person for
having made a covered or suspicious transaction report in the regular performance of
his/her duties in good faith, whether or not such reporting results in any criminal
prosecution under this Act or any other law.

Section 6. Prohibited Transactions — Casino operators shall be prohibited from

(A) Any transaction involving the conversion of money from one form to another
without being used for gaming, including —


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1) The receipt of cash for transmittal of all or part thereof through wire or
telegraphic transfer for or on behalf of a customer;

2) Payments in cash of funds received through wire or telegraphic transfer;

3) The cashing of checks or other negotiable instruments; and

(B) _ Receiving money, the purpose or ownership of which cannot be ascertained
within a period of at leastseven (7) days from the date of the receipt.

Section”, Authority to Inquire into Customer Accounts-The AMLC may inquire into
or examine any particular account,including related accounts, with any casino operator thatis
deemed related to any unlawful activityormoney laundering offenseas defined under Republic
‘Act No. 9160, as amended, or financing of terrorism as defined under Republic Act No.
10168.

For purposes of this section, ‘related accounts’ shall refer to accounts, the funds and
sources of wi iginated from and/or are materially linked to the accountssubject of a
freeze order(s) issued by acompetent authorityor subject of an inquiry under the preceding
paragraph.

Section 8. Freezing and Forfeiture of Monetary Instruments or Properties~ The
freezing and forfeiture of monetary instruments or properties shall be governed by Republic
Act No. 9160, as amended, Casino operators shall not lift the effects of any freeze order
Without seeking official confirmation from the AMLC;Provided, that freeze or forfeiture
orders shall not apply against the general funds of casinos, in the event that the monetary
instruments or properties of the customer have been commingled with other funds or
properties of the casino, rendering the same difficult to be identified or segregated, for
purposes of enforcing the freeze or forfeiture order.

Section 9, AML/CFT Program Requirements for Casinos~ Casino operators are
hereby given one (1) year, from the effectivity of the Implementing Rules and Regulations of
this Act, to formulate their respective money laundering and terrorism financing prevention
programs (ML/TF Prevention Programs) in accordance with this Act including, but not
limited to, information dissemination on money laundering and terrorism financing activities
and its prevention, detection and reporting, and the relevant training of responsible officers
and personnel of casinos. The program must be approved by theirrespective Board of
Directors.

‘The ML/TF Prevention Program should be designed to ensure and monitor
compliance with the requirements set forth in this Act. A system of internal control as well
as internal testing for compliance must be in place to ensureongoing compliance.

Casino operators should designate a compliance officer, to monitor the compliance
with the policies and procedures under its own ML/TF Prevention Programs, and to conduct
the necessary coordination to ensure compliancewith the requirements set forth in this Act.

Section 10. On-site inspection- To ensure compliance of casino operators with this
‘Actand Republic Act No. 9160, as amended, the AMLC may conduct on-site inspection of
relevant casinosrecords and documents.

Section 11. Penal and Administrative Sanctions — Non-compliance with any of the
provisions of this Act shall be punished with penalties and sanctions provided for under
Republic Act No. 9160, as amended.



Section 12. Implementing Rules and Regulations. ~ Within one hundred twenty (120)
days from the effectivity of this Act, the AMLC and the Supervising Authorities shall
promulgate the rules and regulations to implement its provisions.

Section 13. Separability Clause. - If any provision of this Act is declared
unconstitutional, the same shall not affect the validity and effectivity of other provisions
thereof.

Section 14, Repealing Clause—All laws, decrees, orders, and issuances or portions
thereof, which are inconsistent with the provisions of this Act, are hereby repealed, amended
or modified accordingly; Provided, that all provisions of Republic Act No. 9160, as amended,
which are not inconsistent with this Act are hereby adopted.

Section 15, EfectivityThis Act shall take effect fifteen (15) days following its
publication in at least two (2) newspapers of general circulation.

Approved,