AMLC: Suspicious deals reach P556 billion in 3 years

MANILA, Philippines — Covered persons filed suspicious transactions worth P556.24 billion over a three–year period, according to the Anti-Money Laundering Council (AMLC).

In an assessment of the Philippines’ exposure to external and internal threats based on suspicious transaction reports from 2018 to 2020, the AMLC said a total of 840,556 STRs were filed by covered persons of the Bangko Sentral ng Pilipinas, Securities and Exchange Commission and the Insurance Commission.

The AMLC analyzed 31 percent or 258,087 STRs worth P50.57 billion to gain a deeper understanding of the country’s risk and exposure to money laundering, terrorism financing and different predicate offenses by gathering information on the generation, movement and behavior of illicit funds and by evaluating the threats originating within and outside the country’s jurisdiction.

A majority of the STRs in the data set were related to violations of the Securities Regulation Code (SRC) with 40 percent, swindling with 27 percent, and violations of the Special Protection of Children against Abuse, Exploitation and Discrimination Act with 18 percent.

Meanwhile, top contributors in terms of amount generated were swindling with 71 percent, followed by violations of the SRC with 13 percent, and illegal drugs and other related crimes with seven percent.

Based on the United Nations Office on Drugs and Crime figures, the estimated yearly amount of money laundered globally is between P41 trillion and P103 trillion.

With the assumption that the STRs in the study have possible linkage to a certain crime, the AMLC said the total amount of the STRs covered in this assessment accounts for 0.006 percent to 0.014 percent of the total global money laundered for 2018, 0.010 percent to 0.026 percent for 2019 and 0.033 percent to 0.083 percent for 2020.

“This is an indication that there is an increasing trend in the reported suspicious current account and savings account and remittance transactions every year. The study also indicates that proceeds from a majority of the high-risk and medium-risk predicate crimes originated, circulated and remained within the Philippine financial system with the exception of child exploitation and terrorism-related activities,” the AMLC added.

For child exploitation and terrorism related activities, the assessment revealed illicit funds came from other countries with the Philippines being the destination of said funds.

In terms of transaction frequency, top countries that pose the highest threat to the Philippines for inflows are the US with 38 percent, Saudi Arabia with nine percent and the United Kingdom with eight percent. The US also topped the list in terms of outflows accounting for 19 percent, followed by Hong Kong with 12 percent and Kenya with seven percent.

In terms of peso value, the AMLC said the United Kingdom topped the list accounting for 32 percent, followed by the US with 23 percent and Belgium with 12 percent for inward remittances. Top destinations for outward remittances were Hong Kong with 29 percent, US with 16 percent and China with 14 percent.

“It was also noted that banks are the most common financial channels used by perpetrators and money launderers in moving criminal proceeds, especially transactions involving substantial amounts,” the AMLC added.

For small-ticket transactions, the financial intelligence unit said money service businesses (MSBs) and pawnshops with remittance capabilities were also being utilized to move illicit funds.

The AMLC said the data provided in the report should not be interpreted as an assessment of the full amount of criminal proceeds that may have entered, circulated, and exited the Philippines.

“The actual volume and amount of illicit funds may be larger than represented in our sample. Moreover, the statements in the study are not conclusive but are more descriptive of what has been observed on the gathered STR data from 2018 to 2020. These STRs also need further verification and more in-depth investigation to substantiate likely linkage to a certain crime,” it said.

Last June 25, the Philippines landed in the gray list or jurisdictions under increased monitoring to address strategic deficiencies in money laundering as well as terrorist and proliferation financing of Paris-based global dirty money watchdog Financial Action Task Force (FATF).