26 Feb 2020
European regulators have identified vulnerabilities in the anti-money laundering and terrorism financing measures at Melco Resorts’ casino in Cyprus, an inquiry into Crown has heard.
The Council of Europe’s anti-money laundering body, Moneyval, said in December 2019 that it had discovered “weaknesses” in compliance at the single casino on the island, City of Dreams Mediterranean, at a time when the business was planning an “aggressive expansion”.
The finding suggests that Lawrence Ho’s Melco Resorts is under the scrutiny of regulators in at least three jurisdictions, while Japanese authorities investigate its potential links to bribery claims and a powerful NSW probe considers its purchase of a 10 per cent stake in Crown last year.
Macquarie University honorary research fellow, John Langdale, told the Crown inquiry on Wednesday that Cyprus had high rates of illicit financial activity tied to Russia and even the terrorist organisation, Hezbollah.
“It’s not for the faint-hearted, really,” Dr Langdale said.
The criminology expert also said Australia may be a target for Chinese transnational crime networks seeking a “regional hub”, owing to its relative stability as an investment destination but also to its status as a significant consumer of illicit drugs from Asia.
“We would be in the top five destinations for capital flight,” Dr Langdale said, noting that premium real estate and high-rolling tables at casinos offered avenues for both legitimate spending and money laundering.
Money laundering, the process of disguising illegally sourced funds to make them seem legitimate, crudely involves three steps: placement (introducing dirty money to a legitimate financial system), layering (actions to conceal the source of the original sum) and integration (withdrawal of the “cleaned” cash).
Dr Langdale described money laundering as the “grease that facilitates criminal activity”, which encompasses the trafficking of drugs, endangered species and people, noting the IMF’s estimate that the total volume of laundered money worldwide accounts for 2 to 5 per cent of global GDP.
By Bo Seo, The Australian Financial Review, 26 February 2020
Read more at The Australian Financial Review
RiskScreen: Eliminating Financial Crime with Smart Technology
You can claim CPD minutes for this content, by signing up to our CPD WalletFREE CPD Wallet