Report indicates terror, crime funds trickling in casinos

Report indicates terror, crime funds trickling in casinos

 Indicating signs of possible funds related to crime and terror trickling into the Indian casino sector, a government report has said that more than 7,000 instances of suspicious transactions have been detected in the elite gaming business during the last financial year.

A total of 7,006 Suspicious Transaction Reports (STRs) during the 2010-11 fiscal have been reported by the casino business and allied payment operators to the Financial Intelligence Unit (FIU), an enforcement agency under the Union Finance Ministry.
The casino business in the country was brought under anti-money laundering laws in 2009 and the operators primarily provide slot machines and electronic games to customers.

According to a 2010 report of the Financial Action Task Force (FATF), the top global financial body set up by G-7 nations in 1989 to combat financial crimes, India has just more than 20 casinos.

While Goa, the state with numerous sun-kissed beaches, has the majority of these gaming facilities, 14 land-based casinos (located in five-star hotels) and six offshore (ship-based), there are a few in Sikkim too.

"The casino sector, although small in India, is vulnerable to instances of criminal money and terror funding in its channels. The STRs in the last fiscal indicate the unusual complexity of money involved in the sector," a Finance Ministry official said.

However, nor the FIU report or the official could quantify the number of those STRs which indicate terror financing and their ultimate results as the FIU dispatches such reports to agencies like CBI, Income Tax department and Intelligence Bureau for further action.STRs are those reports which either suggest a reasonable ground of suspicion that the transaction may involve the proceeds of crime or financing of terrorism or were made in circumstances of unusual complexity or appear to have no economic rationale or bonafide purpose.

An STR includes details of all accounts, transactions, individuals and legal persons or entities related to a suspicious transaction.

In the backdrop of these high-number of STRs from the sector, a high-level panel- Casino Sector Assessment Committee (CSAC), headed by the FIU Director, had some time back recommended to the Finance Ministry that the casino business in India should be brought under a "comprehensive legal framework" while "autonomous regulators or Gaming regulators" could be created for strengthening the anti-money laundering and financing of terror regulations in the sector.

The recommendation was made by the FIU, the nodal agency for receiving, analysing and disseminating data related to suspect transactions under the Prevention of Money Laundering Act (PMLA), after it carried out an assessment of the sector recently, in terms of detecting and reporting suspicious and counterfeit currency transactions in the sector.
The FIU also recommended to the government that the Know Your Customer (KYC) guidelines prevalent in the sector at present should be reviewed and brought at par, as stipulated by global financial bodies like the FATF.

Strengthening money laundering laws in the casino sector is one of the major recommendations of the FATF, of which India became a full-member last year.

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