Money for drugs, human trafficking coursed through PH banks – AMLC

MANILA, Philippines – The dirtiest cash from the most vile syndicates have been circulating in the Philippine financial system through commercial banks, the Anti-Money Laundering Council (AMLC) stated in a report.

The report entitled "A risk assessment on the Philippines' exposure to external threats based on submitted suspicious transaction reports" indicated that perpetrators for majority of the predicate crimes such as illegal drugs, plunder, estafa, smuggling, indigenous rights violations, illegal firearms, and internet-related crimes moved funds through commercial banks.

AMLC's study covered 161,650 suspicious transaction reports (STRs) totaling P17.9 trillion from January 2013 to December 2017. These STRs were submitted to AMLC by the Bangko Sentral ng Pilipinas.

Moreover, the study found that the Philippines has "become the destination of illicit funding" for violation of environmental laws, illegal trafficking of persons, kidnapping for ransom, as well as terrorism and conspiracy to commit terrorism. 

The report also found that the Philippines has become a source of illicit funds generated from smuggling for the period under review.

In terms of volume, majority of the inflows and outflows of all predicate crimes have been linked to the United States. In terms of peso amount, majority of incoming criminal proceeds were coursed through various banks in the United Kingdom, while large amounts of outgoing funds were sent mostly to Hong Kong.

Drug money

The United Kingdom, US, and Oman were the countries that have the most number of transactions linked to drugs from 2013 to 2017. Similarly, the United Arab Emirates, Oman, and the US were the countries with large amounts of inward remittance transactions during the same period.

Nigeria, the US, Malaysia, and Costa Rica were the top countries where the proceeds of the drug-related funds go, comprising majority of the total amount of outflows from 2013 to 2017.

Terrorism

AMLC also found activities involving financing of terrorism, which were mostly circulating domestically.

More than half of these transactions were filed in relation to the unusual remittance transactions of a Makati City-based businessman to various beneficiaries in different provinces, including a certain individual from Lanao del Norte. AMLC said this might be related to terrorism financing.

A total of P386.8 million was monitored by AMLC during the review period. P289.6 million or 74.9% were generated and circulated within the Philippines, while the remaining P97.1 million or 25.1% came from outside sources.

In terms of peso value for inflows, the country that sent the highest amount of remittances was Myanmar, amounting to P86.39 million or 89% of the total inflows. It was in 2014 that AMLC monitored a certain local company receiving cash from Myanmar for "payment for contracting services."

AMLC also found that most terrorists moved cash through commercial banks.

Human trafficking

The bulk of the financial activities linked to human trafficking from 2013 to 2017 were inflows from other jurisdictions. 

In terms of volume and number of transactions, the US and Canada were the top sources of cash inflows.

In terms of peso value, Slovakia had the largest amount of inward remittances related to human trafficking, amounting to P5.66 trillion or 99.37% of the total value of cash inflows. The remittances from Slovakia are all related to cyber pornography.

Majority of the total inflows were linked to cyber and child pornography, sex trafficking through publication of sex-related advertisements, facilitation of prostitution, human and child sex trafficking, and qualified trafficking in persons and violations of the child abuse law. 

Environmental exploitation

The report also said that the country is the destination of illicit funds generated from various violations of environmental laws. Activities associated with environmental crimes include wildlife smuggling, illegal mining, and illegal logging.

In terms of volume, the US, France, Taiwan, and Canada topped the list of countries which had inflows and outflows of cash, mainly attributable to wildlife smuggling. In terms of peso value, Hong Kong had the largest amount of inward remittances, which is linked to illegal mining. 

Based on the findings of the study, AMLC said there was a need for "immediate referral" of the transactions to the appropriate law enforcement agencies and other authorities. – Rappler.com 

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.

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