Financial Crime World

Gaps in Philippines’ Fight Against Terrorism Financing and Money Laundering

A recent assessment by international experts has revealed significant gaps in the Philippines’ efforts to combat terrorism financing (TF) and money laundering (ML). This report highlights the need for improvements in cooperation, coordination, and implementation of anti-money laundering/combating the financing of terrorism (AML/CFT) measures across various sectors.

Limited Cooperation and Coordination

The assessment notes that there is limited cooperation and coordination among law enforcement agencies (LEAs) and regulatory bodies. The National Anti-Money Laundering Council (NACC) has identified key risks, but its action plans to address these risks are still in various stages of implementation.

  • Private sector stakeholders are aware of the risk assessments conducted by the National Risk Assessment Committee (NRAC), but smaller financial institutions and casinos seem to be less informed and responsive to the identified threats.
  • The NACC’s efforts are hindered by limited cooperation and coordination among LEAs and regulatory bodies, leading to delayed implementation of AML/CFT measures.

Limited Use of Financial Intelligence

The report also criticizes the Anti-Money Laundering Council (AMLC) for its limited use of financial intelligence in investigations. Despite producing high-quality financial intelligence products, AMLC rarely proactively disseminates this information to other LEAs, and there are concerns about its operational independence during election periods.

  • The Financial Intelligence Analysis Group (FIAG) produces primarily for internal use by the council’s own investigation wing, with limited requests from LEAs or spontaneous dissemination of financial intelligence to support predicate crime investigations.
  • This limited use of financial intelligence hinders effective investigations and prosecutions of TF and ML cases.

Areas for Improvement

The assessment highlights several areas where improvements are needed:

  • Enhanced Cooperation and Coordination: Improved cooperation and coordination among LEAs and regulatory bodies are essential to effectively combat TF and ML.
  • Better Implementation of AML/CFT Measures: The implementation of AML/CFT measures across various sectors, including financial institutions, casinos, and other high-risk businesses, is critical to preventing TF and ML.
  • Improved Use of Financial Intelligence: The effective use of financial intelligence in investigations is crucial for identifying and prosecuting TF and ML cases.
  • Greater Transparency and Accountability: Greater transparency and accountability are necessary to ensure that sensitive information is handled properly and that AML/CFT measures are implemented effectively.

Conclusion

The Philippines must address these gaps to effectively combat terrorism financing and money laundering, as well as other serious crimes. International experts will continue to monitor the country’s progress in this regard, and it is essential that the government takes concrete steps to improve cooperation, coordination, and implementation of AML/CFT measures.