MANILA, Philippines — Suspicious transaction reports (STRs) have breached 400,000 cases as consumers shift to digital transactions amid the coronavirus disease 2019 or COVID-19 pandemic, according to the Anti-Money Laundering Council (AMLC).
Mel Georgie Racela, executive director of the AMLC Secretariat, said in a virtual press conference that the number of STRs so far this year has exceeded the 400,000 recorded in 2019.
“It has already reached the same number for the entire year last year. So yes, it has been increasing,” Racela said.
The STRs play a crucial role in the fight against money laundering and terrorism financing.
Covered entities are required to file STRs regardless of the amount under the following circumstances such as there is no underlying legal or trade obligation, purpose or economic justification; the client is not properly identified; the amount involved is not commensurate with the business or financial capacity of the client; if the client’s transaction is structured in order to avoid being the subject of reporting requirements under the Anti-Money Laundering Act (AMLA); and if the transaction which is observed to deviate from the profile of the client’s past transactions.
Racela said another circumstance is if the transaction is any way related to an unlawful activity or any money laundering activity such as kidnapping for ransom, illegal drugs, plunder, robbery or extortion, hijacking, among others.
“So the number is not indicative of any increasing number of crimes also in the Philippines,” he added.
According to AMLC, it has conducted a study on STRs amid the COVID-19 pandemic as money launderers and perpetrators of financial crimes are taking advantage of the shift in consumer behavior due to the global health crisis.
In its latest typologies brief titled “COVID-19 financial crime trend analysis,” AMLC said criminals are abusing the digitalization such as digital know-your-customer (KYC) and customer due diligence (CDD) adopted by covered persons particularly banks and financial institutions during the height of the containment measures to prevent further spread of the deadly disease.
“We have analyzed the STRs occurred during the pandemic to cover the period January to April. We noticed an increase in online fraudulent transactions,” he said.
The Philippines is in danger of being included in the gray list and facing sanctions from Paris-based global watchdog Financial Action Task Force (FATF) after it was placed under a 12-month observation period by the Asia Pacific Group on Money Laundering (APG).
The country was blacklisted by the FATF in 2000 for failing to address “dirty” money issues paving the way for the enactment of AMLA in 2001. The country was subsequently removed from the blacklist in February 2005.
It narrowly avoided being placed on blacklist in 2012 as it criminalized terrorist financing and pursued quicker freezing of suspect accounts.