NACC: No bark, no bite
TERRORISM, both on the domestic and global fronts, cannot survive without dirty money changing hands.
Terrorism, therefore, is synonymous with underground funds moving around from donors to recipients or end-users, meaning the terrorists themselves.
Osama bin Laden could not have orchestrated the infamous attacks on the United States, which led to the deaths of thousands, without terrorist financing.
This is why nations of the free world deemed it imperative to create their respective anti-money laundering bodies to curb the cross-border transmission of illicit funding for terrorist activities.
Expectedly, some watchdogs are more effective than others.
Let us talk about our own AntiMoney Laundering Council (which, curiously enough, was founded in 2001). The AMLC was established by Republic Act 9160, also known as the Anti-Money Laundering Act of 2001, to carry out “terrorism financing prevention and suppression.”
In 2023, President Ferdinand Marcos Jr., in Executive Order 33, signed on his behalf by Executive Secretary Lucas Bersamin, ordered all government offices and departments to adopt the National Anti-Money Laundering, Counter-Terrorism Financing, and Counter-Proliferation Financing Strategy (NACS) 2023-2027.
EO 33 states that the aim of NACS is to “ensure that the country exits the Financial Action Task Force (FATF) Gray List and improve its anti-money laundering, counter-terrorism financing, and counter-proliferation financing (AML/CTF/CPF) regime.”
Given the expiration of the previous NACS for 2018-2022, our government thought it necessary to adopt a new national strategy for 2023-2028. This was also part of the government’s efforts to move the Philippines out of the Gray List — a list of countries that failed to show tangible and positive progress in addressing strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing.
Considering the marked deficiencies in preventing proliferation financing, NACS 2023-2027 added Counter Proliferation Financing as part of its name. An additional subcommittee on proliferation financing was likewise created.
The National AML/CFT Coordinating Committee, or NACC, was directed by the President “to cover as well activities related to countering proliferation financing.”
President Marcos named Bersamin chairman of the NACC, with Bangko Sentral ng Pilipinas Governor Eli Remolona Jr., who heads the AMLC, sitting as vice chairman.
Make no mistake, I have enormous respect for Luke Bersamin as a highly accomplished magistrate, but we have yet to hear from him about any NACC move in the right direction.
It seems neither the AMLC, BSP nor even NACC have done significant work on this matter. Our regulators cannot even stop illicit companies in the country widely known to be avenues of terrorist financing.
Take one clear example of this — cryptocurrency giant Binance.
Practically all major publications have covered our Securities and Exchange Commission’s (SEC) delayed ban on Binance and its illegal activities.
This ban, while widely announced, hasn’t even been enforced. Anyone can still download and use Binance.
We don’t even need to do sophisticated intelligence gathering to know of Binance’s record.
A simple Google search would show how it was widely reported that in 2019, Binance’s then-chief compliance officer Samuel Lim himself acknowledged that the exchange was being used to funnel money to Hamas, explaining to a colleague that terrorists usually sent “small sums.”
The global trading platform, which accounts for about half of all crypto activity, pleaded guilty to these charges and has agreed to pay $4.4 billion in record fines to settle.
US Treasury Secretary Janet Yellen said, “Binance turned a blind eye to its legal obligations in the pursuit of profit. Its willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform.”
From around 2018 to 2022, Binance processed millions of crypto transactions worth at least $898.6 million between US customers and those who lived in Iran. The US government said that Binance continued to serve “thousands of users” identified as being from sanctioned countries through 2019, including over 12,500 users who provided Iranian phone numbers. In 2022, Reuters cited data showing that Binance processed some $7.8 billion, which flowed between Binance and Iran’s largest crypto exchange, Nobitex, according to a review of data from leading US blockchain researcher Chainalysis. Nobitex offers guidance on its website on how to skirt sanctions.
This is why our government ought to check unregulated cryptocurrency players, not just Binance.
Like it or not, terrorism is in the Philippines, evinced by the 2017 siege that shattered Marawi City and the recent bombings during Catholic masses attributed to the Islamic State in Mindanao. Parts of Marawi remain uninhabitable, and the effects of these acts continue to be felt until now.
Reality check. The Philippines has not at all inched forward in exiting from the FATF Gray List, let alone checked terrorism or proliferation financing.
Our so-called Little President, with his quasi-presidential powers, remains wanting in the discharge of his mandated tasks and responsibilities as NACC chief. This corner is always open to any rejoinder from your end, sir.
With all due respect, what we need is actual action and not another national strategy.