AMLC asked to show Accomplishments
The Philippines passed its first Anti-Money Laundering Law in 2001 to avoid being put in the FATF’s black list of money laundering havens.
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AMLC asked to show Accomplishments
Cecille Suerte Felipe, Paolo Romero (The Philippine Star) - October 29, 2020 - 12:00am

MANILA, Philippines — The Anti-Money Laundering Council (AMLC) has been asked to show results in the implementation of the country’s anti-money laundering law as the Senate works to pass amendments to prevent the Philippines from falling into the Financial Action Task Force (FATF)’s gray list.

The Philippines passed its first Anti-Money Laundering Law in 2001 to avoid being put in the FATF’s black list of money laundering havens.

The FATF is an international money laundering watchdog based in Paris, France.

“The country’s financial experts want us to treat this as a form of national economic emergency, the same way we treated the pandemic as a national health emergency,” Sen. Grace Poe said at the hearing yesterday of the Senate committee on banks, financial institutions and currencies, which she chairs.

“Note that we are not only required to pass these amendments, but also to demonstrate tangible and positive progress in our anti-money laundering and counterterrorist financing regime,” Poe said.

The hearing tackled proposed amendments to the Anti-Money Laundering Law, which has been amended twice since 2001.

The Asia Pacific Group’s October 2019 Mutual Evaluation Report on the Philippines said there are significant money laundering risks in the Philippines’ casino sector and that money service businesses have been used by criminals in drugs and sex trafficking.

Virtual assets must now also be taken into consideration.

The report noted that investigations and prosecutions for money laundering in the Philippines are low considering the country’s risk profile.

“We are treating this with urgency and caution. We don’t want our overseas Filipino workers (OFWs) to bear the brunt of a gray listing, which will increase the cost of sending remittances to the Philippines,” Poe said.

“Higher remittance costs mean less money for OFW families to spend here. This will weigh on consumer spending and take a toll on the economy that is already being hurt by the pandemic,” she added.

As of the end of August, the Bangko Sentral ng Pilipinas reported a net outflow of $3.889 billion in foreign portfolio investments.

“The benefits of addressing the problem of money laundering go beyond the FATF’s gray list. Ordinary Filipinos will significantly benefit from such if anti-money laundering efforts can show results in terms of confiscating proceeds from graft and corruption, drug trafficking and other predicate crimes. The AMLC should demonstrate its benefits to us while we in the legislative do our part,” Poe said.

New laundering instruments

Meanwhile, Sen. Imee Marcos has raised fears on personal protective equipment, testing kits, disinfectants, respirators, surgical tools and future vaccines becoming the newest instruments for money laundering.

Marcos, who chairs the Senate committee on economic affairs, explained that the urgent and high global demand for medical supplies and equipment to fight the COVID-19 pandemic has led to more relaxed procurement processes and regulatory requirements by governments and private hospitals, making them vulnerable to financial fraud.

Marcos said medical needs have presented new avenues for money laundering, with financial criminals evading detection in casino and real estate operations which have weakened due to pandemic restrictions on public gatherings and the lower demand for huge office spaces as work-from-home arrangements become the new norm.

“Amendments to the Anti-Money Laundering Act should not be outrun by these new developments,” she said.

The latest plenary report of the FATF noted a growing incidence of financial fraud involving overpriced and counterfeit medical goods.

The Council of Europe’s monitoring body Moneyval has also cited fraud with medical equipment among the types of financial crime that have increased amid the pandemic.

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