AMLC warns of steady rise in shady fund transactions

MANILA, Philippines — The Anti-Money Laundering Council (AMLC) sees a steady rise in the number of suspicious transaction reports (STRs) after breaching the one million level last year as the Philippines ramps up its campaign against money laundering and terrorist financing.

In a report,  the AMLC said STR submissions are expected to grow by approximately 26 percent in 2021 and by 44 percent in 2022.

“This means STRs could reach more than 1.2 million and 1.8 million by   2021 and 2022, respectively, if there will be no intervention made by AMLC and/or change in the current submission patterns,” the report said.

Latest data showed STR submissions surged by 63 percent to a record 1.02 million in end- 2020 from 622,864 in end- 2019.

This was faster than the 27 percent increase recorded in 2019 and 2020.

“The surge in STRs in 2020 could be attributed to the more than doubled STR filings of pawnshops to 149,935 last year from 74,074 in 2019, money service business to 139,757 from 55,042,and electronic money issuers to 144,294 from 67,518,” the AMLC said.

The financial intelligence unit said the STR growth in the three industries alone jumped by 65 percent to 237,352 STRs in 2020, higher than the 143,457 STRs filed by universal and commercial banks.

As a result, the STRs filed by pawnshops, money service business, EMIs and big banks increased by 380,809.

In terms of reason for filing, the AMLC observed that predicate offenses related to online sexual exploitation of children significantly surged in 2020.

Data showed violations of special protection of children against abuse, exploitation and discrimination jumped by 3,906 percent or 57,461 STRs, while violations of the Anti-child Pornography Act of 2009 surged by a dramatic 11,126 percent or 14,019 STRs.

Fraudulent practices and other violations under the Securities Regulations Code of 2000 fell by 30 percent considering that the upsurge in 2019 likely resulted from the Securities and Exchange Commission’s intensified campaign against investment scams.

The AMLC said the monthly STR submission in 2019 was smoother compared to 2018 except for a sudden spike in   December when a bulk filing of 34,909 STRs related to potential money mule/pass through account.

It added the upward drift on the STR submission was temporarily halted from March to May 2020 where a sharp decline in STR filing was noticeable.

“This could be attributed to work arrangements and submission process adjustments due to the Luzon-wide lockdown in relation to the COVID-19 pandemic. Nevertheless, submission rate bounced back to an upward trend starting June 2020 when most lockdowns were lifted, and the economy slowly resumed to the new normal,” it  said.

Out of the total 2.4 million STRs filed from 2017 to 2020, the AMLC said about 2.5 percent or 61,138 STRs are triggered by AMLC correspondences and freeze orders, 2.7 percent or 64,724 STRs by SEC advisories, and 3.5 percent or 84,060 STRs by adverse media.

Aside from these STRs, 0.4 percent or 8,939 STRs were triggered by a combination of AMLC correspondences, freeze orders, SEC advisories, and adverse media.

AMLC-triggered STRs increased to 20,665 in 2020 from 9,728 in 2019 due to the various spontaneous disclosures and typology publications of the AMLC, such as studies on child pornography, COVID-19 financial crimes trends, online casinos, among others.

In addition, media- triggered STRs also surged in 2020 due to various high-profile cases that were publicly reported such as the Wirecard and PhilHealth cases.