Tighter anti-money laundering monitoring now in force
TIGHTER RULES on report submission on potential dirty money transactions take effect today, under new guidelines which also require financial firms to upload customer data to the online portal of the Anti-Money Laundering Council (AMLC).
In December, the financial intelligence unit announced the adoption of comprehensive AMLC registration and reporting guidelines (ARRG) for financial institutions, which will digitize submissions as well as the flagging of alerts, analysis, investigation, and escalation of reports to the regulator.
The changes are outlined under AMLC Resolution No. 107 which compels covered institutions to submit covered transaction reports and suspicious transaction reports within five to 10 days from the occurrence or discovery of such deals.
The guidelines also make it mandatory for firms to upload know-your-customer documents to accompany suspicious transaction reports, which is expected to make it easier for the AMLC to assess and go after illegal wealth.
The online filing of these client data is required for funds believed to be proceeds of kidnap- forransom, drug trafficking, murder, hijacking and terrorism. Among the information sought by the regulator include signature cards; customer information sheets; and scanned copies of government-issued identification cards, articles of incorporation for businesses; and digital photos.
“The requirements for the uploading of know-your-customer documents and the uploading of electronic returns for freeze orders shall take effect on the first banking day of January 2018,” the financial intelligence unit said in an advisory posted on its Web site.
The AMLC is tasked to track, investigate, and recover ill-gotten wealth and combat terrorist financing.
As a rule, covered entities must report to the AMLC any fund transfers amounting P500,000 in a day. Meanwhile, suspicious transactions are those which appear out- of- pattern or unjustifiable compared to a person’s financial position, which may be taken as a potential case of unexplained wealth from illicit sources.
Under the ARRG, all reporting institutions are required to
upload reports through AMLC’s online system through unique 18-digit numbers assigned upon registration, where they will course all submissions to the regulator.
A separate platform will be created for casino and other gaming operators, following the recent passage of a law that requires the reporting of single cash transactions worth above P5 million and suspicious transactions to the AMLC.
These changes come after a government-wide survey showed that money laundering threat in the Philippines remained “high” as of 2015-2016, unchanged from a previous report which covered the years 2011 to 2014.
The Philippines remains vulnerable to money laundering as gaps in local laws keep the country as a viable venue for dirty money with banks and remittance agents used as main channels, according to the second National Risk Assessment report published last month.
Other platforms considered with a “high” risk of being used for dirty money deals include jewelry dealers, lawyers, accountants, casinos, and non- profit organizations. Meanwhile, risks involving insurance brokers and securities dealers were given a “medium” threat rating as investment-related scams and pyramid schemes remain.
The Philippines also serves as a safe haven for international criminals to cleanse ill- gotten funds, the AMLC said. Some P608 billion worth of dirty money trickled in from foreign sources, the biggest of which are in Kazakhstan and the United States. Bulk of these funds were drawn from fictional entrepreneurship, tax evasion and fraud, and were mostly transferred via bank transactions.
Back home, the biggest sources of illegal funds are tax evasion, smuggling, copyright infringement, illegal manufacturing of firearms and explosives, environmental crimes, investment fraud, drug trafficking, and corruption in government, the report added.
In July last year, the Philippines got out of the watch list of the Asia Pacific Group on Money Laundering, which is the regional unit of the global watchdog Financial Action Task Force that monitors the adequacy of laws to combat dirty money.