Financial Crime World

Philippines Grapples with Money Laundering Challenges as it Pursues AMLC Certification

The Philippines is facing numerous challenges in its fight against money laundering, which could result in significant reputational damage and economic costs if not addressed effectively.

Anti-Money Laundering Council (AMLC) Challenges

The AMLC has identified various sectors that require certification to prevent money laundering. These sectors include:

  • Banks
  • Offshore banking units
  • Quasi-banks
  • Trust entities
  • Non-stock savings and loan associations
  • Pawnshops
  • Foreign exchange dealers
  • Money changers
  • Electronic money issuers

Covered Transactions

According to the Anti-Money Laundering Act (AMLA), a “covered transaction” refers to any financial transaction that exceeds certain thresholds, including:

  • Cash transactions surpassing PHP 500,000 (approximately $8,940)
  • Casino transactions exceeding PHP 5,000,000 (approximately $89,406)
  • Engagements with dealers in jewelry, precious metals, or stones exceeding PHP 1,000,000 (approximately $17,883)

Importance of Ongoing Monitoring

The AMLC emphasizes the importance of ongoing monitoring to detect potentially suspicious or illicit activities. Failure to comply with AML regulations can result in severe penalties, including imprisonment and fines.

Philippines’ Current Status

Despite efforts to strengthen anti-money laundering measures, the Philippines remains on the Financial Action Task Force’s (FATF) “grey list” of jurisdictions under increased monitoring. The country faces numerous challenges, including:

  • Risk of money laundering from casino junkets
  • Absence of prosecution in terrorism funding cases

Consequences of Non-Compliance

Experts warn that if the Philippines fails to effectively address these concerns, it could face significant reputational damage and economic costs, including:

  • Increased scrutiny from international financial institutions and regulatory bodies
  • Stricter due diligence from financial institutions
  • Challenges in accessing international financial markets

Addressing Challenges

To address these challenges, the Sumsub team has compiled essential tools, checks, data, and documents required for AMLC certification in the Philippines. The guidelines provide links to pertinent laws and cover topics such as:

  • Customer identification
  • Verification
  • Due diligence measures for non-face-to-face business relations

Conclusion

As the country pursues its goal of securing removal from the FATF’s “grey list”, it is crucial that financial institutions and regulated businesses take proactive steps to ensure compliance with AML regulations. With the right tools and guidance, the Philippines can effectively combat money laundering and maintain a strong reputation in the global financial community.