Fintechs tapped for info in probe vs dirty money

MANILA, Philippines — Digital and financial technology (fintech) companies have partnered with the Anti-Money Laundering Council (AMLC) as part of efforts to fight money laundering and terrorism financing in the country.

Lito Villanueva, founding chairman of Fintech Alliance.ph, said the organization recently signed an Information Sharing Protocol (ISP) with the AMLC amid the rising number of digital transactions due to mobility restrictions to slow the spread of COVID infections.

“The partnership between the public and private sector aims to eliminate money laundering activities, terrorism financing, and other illegal activities that may negatively disrupt the country’s financial ecosystem,” Villanueva said.

With the increased use of fintech applications over the course of this pandemic, there has been a significant increase in the number of digital transactions in the Philippines, he said.

As such, it gave rise to concerns such as online fraud and cyberattacks that could jeopardize the trust of various stakeholders in the country’s financial system.

Unlike most financial intelligence units (FIUs), the AMLC is a hybrid FIU with authority to receive and analyze suspicious transaction reports; investigate money laundering and terrorism financing; and cause the filing of forfeiture proceedings and money laundering cases.

AMLC Secretariat executive director Mel Georgie Racela said sharing of information is crucial in the fight against money laundering and terrorism financing.

“The AMLC and Fintech Alliance.ph recognize a genuine culture of trust, partnership, and cooperation to achieve shared objectives. Consultations on the strategic priorities and plans and the sharing of information are crucial as well. This is an alternative to the rigid rule-based approach to compliance with the law where the government presents itself as an authority ensuring compliance under the consequence of penalty and sanctions,” Racela said.

Both parties also agreed to collaborate in the areas of information exchange, and capacity building to enhance each other’s abilities to address money laundering, terrorism, and terrorism financing concerns.

The partnership institutionalizes an effective documentation mechanism that performs targeted suspicious transaction monitoring and reporting and develops valuable or breakthrough investigative leads.

By signing the ISP agreement, both parties hope to continue upholding the trust that stakeholders have invested to the country’s financial system through the years.

“The AMLC has always been eager to collaborate with various agencies and organizations in detecting both criminal acts and money laundering to reinforce the public confidence in the country’s financial system,” Racela said.

Fintech Alliance.ph is composed of digital and fintech companies from startups to unicorns, generating close to 90 percent of the volume of fintech-initiated transactions in the country today.

It also established the fintech sector’s code of conduct and code of ethics in partnership with Philippine regulators governing its members, adopting global standards on corporate governance and techno-ethics.

Paris-based global dirty money watchdog Financial Action Task Force (FATF) has reincluded the Philippines in the gray list or list of jurisdictions under increased monitoring after the country failed to address the technical deficiencies raised by the Asia Pacific Group on Money Laundering (APG) under the October 2019 Mutual Evaluation Report (MER).