Cambodia, Thailand and Viet Nam target bulk cash smuggling and money laundering in the casino industry
Siem Reap (Cambodia), 5 October 2015 - Money laundering continues to be a serious problem in Southeast Asia. Deficient legal frameworks, weak border controls and poor regulatory mechanisms have made the region into a haven for those seeking to launder money. These activities are regularly used to provide funding to organized crime and terrorist organizations. The implementation of effective anti-money laundering measures could help to deprive these organizations of financing for their activities, a major step in combating their influence in the region. Implementing anti-laundering measures in the region's casinos, currently a bastion of money laundering activity, would go a long way towards accomplishing this goal.
Although gambling is illegal for Cambodian, Thai, and Vietnamese citizens within their respective countries, it is legal for foreigners in Cambodia and Viet Nam. Cambodia has 57 legal casinos and Viet Nam has 28 legal gambling facilities. Kevin Whelan, of the U.S. Department of the Treasury, emphasized that "casinos are often seen as an extremely attractive option for money launderers." Aside from typically being open 24/7, casinos offer a wide range of financial services - ranging from foreign exchange to cheque issuance. In addition, loosely regulated (or completely unregulated) third-party intermediaries, known as junket operators, may obscure the identities and activities of gamblers.
J.P. Galoski from the U.S. Department of Homeland Security emphasized the scale of the money laundering problem: "Over the last two years, there were over 140 currency or monetary instrument seizures related to persons born, residing or holding citizenship in the Greater Mekong region." This amounted to a total of over US$5 million, of which 58% was comprised of bulk U.S. or foreign currency. Due to these seizures 121 financial crimes investigations were launched, involving 186 subjects tied to the Greater Mekong Sub-region. Of these investigations, 43 were tied to bulk cash smuggling.
UNODC took a step towards reducing the Region's money laundering problem during a two-day workshop in Siem Reap, Cambodia, which was organized in conjunction with the U.S. Department of Treasury. The workshop was aimed at identifying, assessing, and evaluating the risks and vulnerabilities related to bulk cash smuggling and money laundering in the casino industry, to help minimize opportunities for related illicit activities in the future. Nearly 20 customs and financial intelligence unit participants from Cambodia, Thailand, and Viet Nam attended the workshop, alongside subject matter experts from the Australian Transaction Reports and Analysis Centre and the U.S. Customs and Border Protection Agency, who shared their expertise with regional participants.
During the workshop, special attention was placed on the Cambodian town of Poipet, located along the Cambodia/Thailand border. Poipet has 10 casinos in operation and more than 90% of the patrons in these casinos are Thai. No visa is required for Thai citizens, Thai Baht is accepted, and daily return buses operate between Bangkok and Pattaya, Thailand. As a result, large amounts of money flow through Poipet's casinos; it is estimated that approximately US$12 million of cash crosses this border town every day. With generally weak anti-money laundering controls currently in place at most casinos, and weak regulatory oversight, the workshop encouraged participants to discuss issues facing border towns, as well as how to best combat money laundering and bulk cash smuggling across borders.
UNODC's regional Anti-Money Laundering Advisor Mr. Chris Batt emphasized that "as anti-money laundering policies in the financial sectors improve, making it harder for criminals to use traditional banking services to launder their criminal proceeds, we are seeing a return of the cash courier and an increase in the incidents of bulk cash smuggling." Mr. Batt also highlighted that "in Viet Nam this year alone we have seen an increase in the number and value of cash seizures by Customs Officers both at airports and land border crossings." To combat this trend the "UNODC will continue working with our partners in all three countries to improve their response to the issue of cash smuggling," Mr. Batt told attendees.
The workshop concluded with countries developing action plans to help curtail bulk cash smuggling and to help ensure compliance with upcoming reviews scheduled in the next few years by the Financial Action Task Force (FATF).
Support from the Government of Germany, Australian Government and U.S. Department of the Treasury made this workshop possible.
