Republic of the Philippines

HOUSE OF REPRESENTATIVES RECEIVED
Constitution Hills — 3.0 JUN 2016
Quezon City ne
SEVENTEENTH CONGRESS

First Regular Session

House Bill No,__ 178

‘Introduced by: Rep. Josephine Y. Ramirez Sato

EXPLANATORY NOTE

‘The Financial Action Task Force, an inter-governmental body of G7 countries,
identified casino as one of the non-financial businesses vulnerable to threats of
money laundering, Thus, the more it needs to be regulated for Anti-Money
Laundering Law and subjected to due diligence, record keeping and reporting of
transactions.

‘The sizeable income brought about by casinos are undeniable. In recent years,
the number of casino operators in the country continue to grow and expected to
bring in more revenues for the government. But the recent multi-million dollar heist
involving large commercial bank and casinos marked one of the largest money
laundering case in the world. This has also lead the local and international bodies to
question the integrity of our banking system’s security.

The advent and rapid advancement of information technology and
communication created financial structures under global system that also created
“mega-byte money”. It has made money-laundering cases more difficult to monitor,
detect and prosecute. Thus, regulatory measures must be established in order to
abate organized crime groups that uses casino as a channel for money laundering.
Systems and counter-measures must be put in place to hinder manipulation of
money from illicit sources and movement of money from organized crime.

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

HON JOSEPHINE Y. R.
Lon¢ Distri¢t of Occident

HOUSE YF REPRESENTATIVES



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bill No. 178

Introduced by: Rep. Josephine Y. Rar

AN ACT DESIGNATING CASINO OPERATORS AS COVERED PERSONS UNDER
REPUBLIC ACT 9160, OTHERWISE KNOWN AS THE “ANTI-MONEY
LAUNDERING ACT OF 2001”, AS AMENDED

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 “Anti-money
Laundering Prevention in Casinos Act”.

SEC. 2. Declaration of Policy - It is hereby declared the policy of the State to
ensure that the Philippines shall not be used as a site for the laundering of proceeds
of any unlawful activity, To this end, it shall protect and preserve the integrity of the
casino industry with a strong and efficient Anti-Money laundering, Consistent with
its foreign policy, the State shall extend cooperation in transnational investigations
and prosecutions of persons involved in money laundering.

SEC, 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.

SEC. 4. Definition of Terms. - As used in this Act:

(a) Account - refers 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 - refers to multiple or series of transactions that are treated as
a single cash transaction if done by or on behalf of a specific customer
involving an amount exceeding the designated threshold in one (1) trading

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day;
(c) Cash - refers to currency notes and coins considered as legal tender in the
country of issue
(d) Check in - refers to transactionsinvolving the receipt of cash by a casino
paid or on behalf of customer. These include the following:
1) Purchases of chips, tokens, and other gaming instruments;
2) Front money deposits;
Safekeeping deposits;
Payments on any form of credit, including makers 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 another currency, and
8) Bills inserted into electronic gaming devices;

ee

(©) Check-out - refers to 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 credit, including markers and counter
checks;

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 another currency;

8) Travel and complimentary expenses and gaming incentives; and

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

5)

(8) Casino ~ refers to gambling casinos where the building, room, or space is
used for social amusements; specifically, one used for gambling through
games of chance, game of cards and game 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 ~ refers 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.

2) Ship-based Casino - refers to gambling casinos, the operation of

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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 N. 9160, as amended, for purposes of casino-related
transactions, covered transaction shall refer to a single transaction
undertaken by any individual per day with the casino involving an
amount excess of four million pesos (PhP4,000,000.00).

(h) Customer - refers 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;

(i) Monetary instrument refers 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 in/ Ticket 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 - refers to acts punished under Section 4 of Republic
‘Act No. 9160, as amended;’

(K) Offender - refers to any person who commits money laundering offense;
() Person ~ refers to any natural or juridical person;

(m) "Proceeds - refers to an amount derived or realized from an unlawful
activity, It includes:

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

2) All monetary, financial or economic means, devices, documents,
costs, outlays, charges, accounts, refunds and other similar items for
the financing, operations, and maintenance of any unlawful
activity;

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 ~ refers to anything or item of value, real or personal, movable or
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immovable, tangible or intangible, or any interest therein or any benefit
privilege, claim or right with respect thereto.

(0) Supervising

authority - refers to PAGCOR, CEZA or any other

appropriate agency, as may be determined by law;

(p) Suspicious transaction - is 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:

ii.

iv.

involves funds derived from any unlawful activity or from a
money laundering offense;

is designed to evade any of the requirements under this Act
or 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
involves the use of casinos to facilitate unlawful activity and
money laundering;

2) Any of the circumstances for the filing of a suspicious transaction
report under Section 3 (b-1) of Republic Act No. 9160, as amended;

and

3) Any other circumstances that may be determined suspicious by the
Anti-Money Laundering Council (AMLO);

(q) Trading day - refers to the normal business day of 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;

(x) Transaction ~ refers to 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 cash from 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;


(s) Unlawful activities - refers to the crimes or offenses listed under Section
3(i) of Republic Act No. 9160, as amended;

SEC. 5. Prevention of money laundering; customer identification requirements and
record keeping;

(a) Customer identification. - Casino operators shall:

1) establish and record based on official documents the true and full
identity of their customers engaging in a single or an aggregate
transaction in excess of two hundred thousand pesos (PhP2000,000);

2) maintain a system of verifying the true and full identity of their
customers and, in case of corporate customers, require a system of
verifying their legal existence and organizational o control structure, as
well as the authority and identification of all persons purporting to act
on their behalf;

3) take reasonable measures to obtain information sufficient to identify
and verify the identity of every beneficial owner of the customer's
account;

4) 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;

5) based on the assessment of risk, endeavor to identify politically-
exposed persons (PEPs) and shall apply enhanced customer due
diligence;

6) 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 source of funds; and

7) 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 preset higher risk of money
laundering.

‘The provisions of existing laws to the contrary notwithstanding,
anonymous accounts, accounts under fictitious 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.


(©) Reporting of covered and suspicious transactions

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

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

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

i) Check-out transactions to 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
table;

ii) Jackpot winnings from slot machine; and

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

(a) Confidentiality 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
‘Transactions Report, or disclose the fact that a Suspicious Transactions
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 the exercise 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 a money laundering offense, or any other
offices or violation under this Act or Republic Act No. 9160, as amended.


(e) Safe Harbor Provision - No administrative, criminal or civil proceeding
shall be against any person for having made a covered or suspicious
transactions 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.

SEC. 6, Prohibited Transactions ~ Casino operators shall be prohibited from engaging
in the following transactions or activities:

1) Any transactions involving the conversion of money from one form to
another without being used for gaining, including:

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

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

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

2)

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

SEC. 7. Authority to inure into Customer Accounts. ~ The AMLC may inquire into or
examine any particular account, including related accounts, with any casino operator
that is deemed related to any unlawful activity or money laundering offense as
defined under Republic Act No. 9160, as amended.

For purposes of this Section, related accounts shall refer to accounts, the funds
and sources of which originated from and/ or are materially linked to accounts
subject of a freeze order(s) issued by a competent authority or subject of any of an
inquiry under the preceding paragraph.

SEC. 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 purpose of enforcing the freeze or forfeiture order:

SEC. 9, Anti-money launderinig 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 prevention programs in

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accordance with this Act including information dissemination on money laundering
activities and prevention, detection and reporting, and the relevant training of
responsible officers and personnel of casinos. The program must be approved by
their respective Board of Directors.

The Anti-money Laundering 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 ensure ongoing
compliance.

Casino operators should designate a compliance officer, to monitor the
compliance with the policies and procedures under its own Program, and to conduct
the necessary coordination to ensure compliance with the requirements of this Act.

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

SEC. 11. Penal and administrative sanctions, - Non-compliance with any of the
provisionsof this Act shall be punished with penalties and sanctions provided for
under Republic Act No. 9160, as amended.

SEC. 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 implements its provisions.

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

SEC. 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, that are not inconsistent with this Act are hereby adopted.

SEC. 15. Effectivity - This Act shall take effect fifteen (15) days following its

publication in the Official Gazette and/ or at leasttwo (2) newspapers of general
circulation.

Approved,