AMLC tracks P62.5 trillion suspicious transactions

MANILA, Philippines — Suspicious transaction reports (STRs) involving tax crimes in the Philippines have reached P62.5 trillion over a three-year period, according to the Anti-Money Laundering Council (AMLC).

Based on an analysis of STRs with possible links to tax crimes conducted by the financial intelligence unit, about 92 percent of the 197,983 STRs filed between January 2018 and November 2020 contain “the amount that is not commensurate with the business or financial capacity of the client.”

The remaining eight percent of the total STRs filed by covered persons pertain to various predicate crimes or suspicious circumstances.

The AMLC said the recent inclusion of tax evasion as a predicate offense under Republic Act 9160 or the Anti-Money Laundering Act (AMLA) of 2001 via RA 11521 signed last Jan. 21 is another milestone for the Philippines.

Last June 25, the Philippines was included in the gray list – jurisdictions under increased monitoring due to strategic deficiencies in their money laundering as well as terrorist and proliferation financing regimes – of global dirty money watchdog Financial Action Task Force (FATF).

The AMLC said the inclusion of tax evasion among the predicate offenses showed the country’s commitment to strengthening its anti-money laundering/combating the financing of terrorism (AML/CTF) framework in consonance with global standards, such as the FATF standards and the Global Principles for Fighting Tax Crime.

“The study concludes that the inclusion of tax evasion as a predicate offense to money laundering will not just support the country’s adherence to international or global standards but will further enhance domestic inter-agency cooperation in combating the same,” the AMLC said.

The new law includes violations of the National Internal Revenue Code of 1997 pertaining to an attempt to evade or defeat tax, or tax evasion as a predicate offense to money laundering.

Tax evaders face fines ranging from P500,000 to P10 million and imprisonment of six to 10 years. Conviction or acquittal will not prevent the filing of a civil suit for the collection of taxes.

In the study, the AMLC used 183,354 STRs filed between January 2018 and November 2020 estimated at P73.2 billion to analyze patterns and trends with possible links to tax crimes.

Institutions supervised by the Bangko Sentral ng Pilipinas (BSP) accounted for 99.4 percent of the total STR filings, while the rest were filed by entities covered by the Insurance Commission, Securities and Exchange Commission and appropriate government agencies for casinos.

“The emergence of banks as top filers, both in volume and peso value, is expected, considering that banks have the capacity to facilitate high-value transfers (e.g., deposits, withdrawals, remittances, investments) and aggregate total relationship balance of its clients/groups,” the AMLC said.

Likewise, it said banks generally employ stringent know-your-customer procedures and enhanced due diligence process.

Cash deposits dominate the share of STRs followed by check deposits, bank transfers and domestic inward remittance.

AMLC chairman and BSP Governor Benjamin Diokno remains confident thatthe Philippines will be removed from the gray list of the Paris-based FATF over the next 18 months as the country has largely addressed the action plans initially indicated in the 2019 Mutual Evaluation Report of the Asia Pacific Group on Money Laundering, bringing down the concerns to 18 from the original 70.

“The Philippines will be delisted from the gray list upon successful completion of all action plans – hopefully on or before January 2023,” Diokno said.