Philippines Struggles with Financial Crime: What’s Behind the Problem?
The Philippines is grappling with a significant issue of financial crime, with its offshore banking and legal entities providing a haven for criminals to hide their ill-gotten gains. This article will explore what’s behind this problem and what steps are being taken to combat it.
Shell Companies and Financial Secrecy Allow Criminals to Conceal Assets
The combination of shell companies, layered trust accounts, and financial secrecy allows corrupt individuals to distance themselves from the beneficial ownership of stolen assets. This makes it difficult for authorities to trace the origin of funds and recover stolen assets.
Offshore Financial Centers: A Haven for Criminals
Offshore banking and legal entities in the Philippines provide a haven for criminals to hide their ill-gotten gains. These centers offer financial secrecy, low taxes, and lax regulations, making it easy for corrupt individuals to launder money and conceal their assets.
UNODC Training Workshop Aimed at Strengthening Anti-Corruption Efforts
To combat these threats, the United Nations Office on Drugs and Crime (UNODC) recently organized an Offshore Financial Crimes Investigation Training Workshop. The training gathered 31 participants from various government agencies, including:
- Office of the Ombudsman
- Department of Justice National Prosecution Service
- National Bureau of Investigations
- Anti-Money Laundering Council
- Securities and Exchange Commission Enforcement and Investor Protection Division
Objectives of the Training Workshop
The workshop aimed to provide investigators with an understanding of the legal structures associated with offshore financial centers and how corrupt individuals may exploit them to conceal and disguise the proceeds of crime. The training also focused on best practices for investigating financial crimes, including:
- Offshore financial centers
- Legal structures such as shell companies and investment funds
- Case studies
- Letters of request
Enhancing Capacities to Conduct Financial Analysis
One of the key objectives of the training was to enhance capacities to conduct financial analysis in the context of the Philippines’ prosecution-led investigations. Participants were shown how easy it is for criminals to establish and abuse offshore corporate entities, and they conducted a simulated country-specific financial crime investigation that focused on unraveling corporate structures and beneficial ownership.
Analyzing Financial Center Jurisdictions and Offshore Tax Havens
Participants examined various financial center jurisdictions and offshore tax havens to determine:
- Account-opening requirements
- Amount of due diligence information available
- Techniques for freezing and analyzing accounts
They also analyzed and discussed best practices for Mutual Legal Assistance in various jurisdictions, including identifying and initiating key steps necessary to submit a successful request for international assistance.
Conclusion
The Philippines is struggling with financial crime, and it’s essential to take proactive measures to combat this issue. The UNODC training workshop is part of the organization’s efforts to support the Philippines in its fight against corruption and financial crime. By enhancing capacities and improving coordination among law enforcement agencies and other stakeholders, we can work together to recover stolen assets and bring corrupt individuals to justice.