In its Resolution No. 195, Series of 2018 dated 28 November 2018, the Anti-Money Laundering Council (AMLC) approved the Report on the Risk Assessment of the NPO Sector, and authorized its dissemination to all stakeholders.
The AMLC organized the NPO Risk Assessment per Recommendation 8 of the Financial Action Task Force’s (FATFs) 40 Recommendations, which provide international standards on the adequacy and effectiveness of rules, regulations, mechanisms and coordination, among others, to combat money laundering and terrorism financing. The FATF is an international standard-setting body that studies money laundering trends, monitors legislative, financial and law enforcement activities at the national and international levels, and reporting on compliance.
In the conduct of said Risk Assessment, particularly data gathering and regulatory information, the AMLC was supported by the Securities and Exchange Commission (SEC), and the Department of Social Welfare and Development (DSWD). The Philippine Council for NGO Certification (PCNC) and the Caucus for Development NGO Networks (CODE-NGO) also gave valuable inputs in said effort.
The Report on the Risk Assessment of the NPO Sector presents and analyzes the money laundering (ML) and terrorism financing (TF) risks posed by NPOs, based on investigations and actual cases, transaction report analyses, and inputs from sector representatives.
The ML threats for the sector were assessed as Medium; TF threats were assessed as High-Low. Vulnerability assessment for both ML and TF was rated Medium. Although regulatory framework was generally effective, enforcement of laws and regulations presented some issues.
The Report recommends specific strategies involving both the public and NPO sectors to mitigate the ML and TF risks associated with NPOs. These strategies include sustained outreach to regulators and the NPO sector, adoption of risk-based regulations and supervision of NPOs and stronger coordination between the government and the NPO sector.
Regulatory agencies and the NPO sector are advised to study the Report for the adoption of, or enhancement of existing rules and regulations, and improved NPO governance.
To view the Report on the Risk Assessment of the NPO Sector, please click this link.