Philippines a haven for money launderers, criminals — AMLC

MANILA, Philippines — The Anti-Money Laundering Council (AMLC) secretariat yesterday reported that the Philippines has become a major destination of illicit funding for violation of environmental laws, trafficking of persons, kidnapping for ransom and terrorism.

A study titled “A risk assessment on the Philippines’ exposure to external threats based on submitted suspicious transaction reports” covered 161,650 reports with an aggregate amount of P17.9 trillion submitted by Bangko Sentral ng Pilipinas (BSP) supervised financial institutions such as banks and money service businesses from January 2013 to December 2017.

The number of reports accounted for 21.4 percent of the total 755,457 suspicious transaction reports (STRs) submitted during the five-year period.

Based on the STRs reported from 2013 to 2017 in the AMLC database, the study showed a majority of the illicit funds generated from the identified top predicate crimes are circulating within the Philippine financial system and may pertain to the same money moving around the country.

It also showed the Philippines has become a source of illicit funds generated from smuggling during the period.

The report added the US posed the highest threat as regards the volume of STRs submitted for both inflows and outflows from 2013 to 2017.

In terms of peso amount for inflows, about 68 percent of illicit funds were coursed through various banks in the United Kingdom.

For outflows, Hong Kong received 29 percent of the illicit funds going out of country.

“Moreover, majority of the illicit funds were moved in and out of the country through commercial banks,” the report added.

The assessment only considered STRs related to predicate crimes with rating of “high” and “medium” during the 2nd National Risk Assessment (NRA).

Predicate crimes were categorized as illegal drugs and other related crimes, plunder and corruption-related crimes, investment scams and estafa, smuggling, violation of intellectual property rights, violation of environmental laws, web-related crimes, trafficking of persons, kidnapping for ransom, financing of terrorism and illegal manufacture and possession of firearms, ammunition and explosives.

Based on the results and findings of the study, the AMLC secretariat said there is a need for immediate referral of various STRs to the appropriate law enforcement agencies, supervisory authorities, AMLC public-private program partners and other jurisdictions through their respective financial intelligence units.

Furthermore, it is also recommended for the AMLC to seek additional information from the appropriate agencies and partners regarding details of the STRs submitted.

BSP Governor Benjamin Diokno and AMLC Secretariat executive director Mel Georgie Racela signed the memorandum of agreement (MOA) updating the previous pact signed in February 2007 as the government continues to step up its battle against money laundering and terrorism financing.

Malacañang earlier tasked the AMLC to lead the preparation of the third round of mutual evaluations to be undertaken by the Asia Pacific Group on money laundering this year to gauge the country’s levels of compliance.

The Philippines has come a long way from the second mutual evaluations back in 2009. In 2013, the country was removed from the gray list of the Financial Action Task Force (FATF)’s International Cooperation Review Group, as most of the deficiencies identified in the second mutual evaluations have been addressed, such as the passage of Republic Act 10168 or the Terrorism Financing Prevention and Suppression Act of 2012.

In addition, the passage of RA 10365 strengthened the AMLA of 2001, as amended, with additional predicate offenses in accordance with FATF-designated categories of offenses.