Terror, crime funds trickling in casinos: Report

More than 7,000 instances of suspicious transactions indicate that funds related to crime and terror are trickling into the Indian casino sector.

New Delhi: 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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