New money laundering schemes detected by BSP

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has directed banks to pay close attention to new forms of money laundering and terrorism financing risks amid the enhanced community quarantine to prevent the spread of the coronavirus disease 2019 or COVID-19.

BSP Deputy Governor Chuchi Fonacier said surveillance reports on the latest anti-money laundering/combating the financing of terrorism (AML/CFT) disclosed new patterns of criminal behavior and emerging COVID-19-related money laundering and terrorism financing risks.

“In addition to phishing or spear phishing campaigns and other cases of fraudulent activities highlighted in BSP-issued advisories, BSP-supervised financial institutions are warned of illegal schemes that exploit the changes in the working arrangements, lifestyles or behavior of the public due to the COVID-19 pandemic,” Fonacier said.

Fonacier said the virus outbreak has posed challenges in the delivery of financial services due to restrictions on the movement of people, goods and services.

Fonacier issued Memorandum 2020-036 reminding banks about financial crimes being committed amid the pandemic.

She said the new illegal schemes include donation or charity scams’ impostor investment and product scams, money mules, online sex trafficking and exploitation, as well as veiled donations for terrorism financing.

“These schemes usually involve financial transactions, such as funds/wire transfers, or use deposit or other transaction accounts. BSFIs are therefore reminded to remain vigilant and to take necessary precautionary measures against these new patterns of criminal behavior as well as emerging typologies on money laundering and terrorism financing activities and other financial crimes being perpetrated amidst the COVID-19 pandemic,” she said.

Fonacier urged banks to consider the new criminal activities and typologies in their AML/CFT controls and compliance processes in order to manage the threats and to accordingly report suspicious transactions to the Anti-Money Laundering Council (AMLC).

 “BSP-supervised financial institutions are also encouraged to prudently leverage on technology to reinforce their controls against fraud or financial crimes,” she added.

The Philippines is in danger of being included in the list of jurisdictions with strategic deficiencies in anti-money laundering and counter terrorism financing of Paris-based Financial Action Task Force (FATF) after it was placed in a 12-month observation period by the FATF-International Cooperation Review Group last October.

The window will allow legislators in the country to pass the proposed amendments to Republic Act 9160 or the Anti-Money Laundering Act (AMLA) of 2001 and RA 9372 or the Human Security Act (HSA) of 2007 before June this year.

The country would be included anew in the “grey list” of the FATF if it fails to address the deficiencies in anti-money laundering and counter terrorism financing system.