PHL stays on US State Department’s major money laundering countries list

US State Department's major money laundering countries list
US State Department's major money laundering countries list

The Philippines remained among the ranks of “major money laundering countries in 2016” after its involvement in the $81-million money laundering scheme, according to the latest report of the US State Department.

“Money laundering is a serious concern due to the Philippines’ international narcotics trade, high degree of corruption among government officials, trafficking in persons, and the high volume of remittances from Filipinos living abroad,” according to the International Narcotics Control Strategy Report, Volume II, Money Laundering and Financial Crimes, March 2017.

“Criminal groups use the Philippine banking system, commercial enterprises, and particularly casinos, to transfer drug and other illicit proceeds from the Philippines to offshore accounts,” it said.

The Philippines figured in a money laundering scheme last year.

“In early 2016, a cyber heist resulted in $81 million of Bangladesh central bank funds laundered through Philippine casinos with the participation of a remittance agent,” the report read.

The money was stolen from the account of the Bangladesh Bank at the US Federal Reserve Bank in New York, transferred to several fictitious accounts at the Rizal Commercial Banking Corp. (RCBC) remitted to to casinos and junket operators.

According to the report, the Philippines has “significant gaps” in its anti-money laundering program such as the non-inclusion of casinos under the authority of the Anti-Money Laundering Council (AMLC).

“The non-inclusion of casinos as covered institutions remains an especially critical concern,” the State Department report read.

The AMLC has since urged Philippine lawmakers to include casinos within the purview of the anti-money laundering law.

The State Department  flagged the Philippines’ bank secrecy provisions, especially the requirement on the part of investigators to first obtain a court order before accessing bank records.

“This makes it difficult for the AMLC to perform its basic financial analytical functions and inhibits the ability of law enforcement to proactively pursue money laundering cases in the absence of a link to a specific predicate crime,” it said.

Both the Department of Finance (DOF) and the Bangko Sentral ng Pilipinas (BSP) have proposed to amend the Law on Secrecy of Bank Deposits and lift certain restrictions.

“While the Philippines has made progress in enacting legislation and issuing regulations, limited human and financial resources constrain tighter monitoring and enforcement,” the report read.

Aside from the Philippines, the State Department also noted 87 other countries considered as “major” money laundering countries:

Afghanistan, Albania, Algeria, Antigua and Barbuda, Argentina, Aruba, Azerbaijan, Bahamas, Barbados, Belize, Benin, Bolivia, Bosnia and Herzegovina, Brazil, British Virgin Islands, Burma, Cabo Verde, Cambodia, Canada, Cayman Islands, China, Colombia, Costa Rica, Cuba and Curacao.

Also on the list are Dominica, Dominican Republic, Ecuador, Egypt, El Salvador, Georgia, Ghana, Grenada, Guatemala, Guinea-Bissau, Guyana, Haiti, Honduras, Hong Kong, India, Indonesia, Iran, Iraq, Italy and Jamaica.

The other on the countries are Kazakhstan, Kenya, Kyrgyz Republic, Laos, Lebanon, Liberia, Malaysia, Mexico, Morocco, Netherlands, Nicaragua, Nigeria, North Korea, Pakistan, Panama, Paraguay, Peru, Philippines, Portugal, Russia, Senegal, Serbia, Sint Maarten, South Africa, Spain, St. Kitts and Nevis.

St. Lucia, St. Vincent and the Grenadines, Suriname, Tajikistan, Tanzania, Thailand, Timor-Leste, Trinidad and Tobago, Turkey, Turkmenistan, Ukraine, United Arab Emirates, United Kingdom, Uruguay, Uzbekistan, Venezuela, and Vietnam complete the list.

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