In a report provided by the US State Department, the Philippines is tagged as a major hub for money laundering and a gateway for transnational drug trafficking due to the loopholes and limitations in the banking system and the lack of jurisdiction of the Anti-Money Laundering Council over financial transactions.
In the 2017 International Narcotics Control Strategy Report by the Bureau of International Narcotics and Law Enforcement Affairs, it has been cited that money laundering is a serious concern for the country due to the country’s international involvement in the narcotics trade, accounts of corruption among public officials, human trafficking and remittances by OFW’s abroad.
According to the report, sophisticated transnational drug trafficking organizations such as the Hong Kong Triads use the country as a transit country for cocaine and methamphetamine. Proceeds of these activities have infiltrated casinos due to its exclusion in the coverage of the Anti-Money Laundering scheme.
The report also pointed out the lack of enforcement and coverage of the Anti-Money Laundering Council as there are no further mechanisms to look after incoming money transfers, lack of automation scheme for import transactions in the Bureau of Customs, and massive corruption that allows dirty money to enter the country’s financial system unnoticed and undetected.
Since its creation in 2001, only 49 Anti-Money Laundering Cases were filed and there were no prosecutions or convictions brought out from these cases. As of the moment, the council only operates as an investigative body rather than a monitoring and enforcement entity.
Currently, a ‘predicate crime’ is needed in order for the AMLC to operate. There are over 14 offenses that qualify in this category including kidnap for ransom, plunder and drug trafficking.