AMLC study on online sexual exploitation on children
The AMLC releases “Online Sexual Exploitation of Children: A Crime with a Global Impact and an Evolving Transnational Threat,” a money laundering and terrorism financing assessment. The study examines the risk exposure of the Philippines to the crime of online sexual exploitation of children (OSEC) or popularly known as “child pornography.”
OSEC is one of the progressing transnational issues that is affecting the domestic population and that has further worsened because of the COVID-19 pandemic. The study uses a descriptive approach in gauging risks associated with OSEC. The study also identifies, describes, and assesses what the factors behind the rapid increase of local OSEC cases are and how these factors evolve. The country’s existing defense mechanisms against OSEC, such as regulatory oversight and controls, are discussed as well.
This risk assessment is designed to provide guidance to covered persons (CPs) and law enforcement authorities (LEAs). OSEC-related financial indicators, suspicious triggers, and case typologies disclosed in the study provide a strategy to assist CPs and LEAs in identifying and detecting financial transactions possibly associated with OSEC-linked activities.
Although the study presents multiple financial indicators and suspicious triggers, these are not intended to be comprehensive and conclusive because they may not be present in all cases. Nonetheless, the financial indicators and triggers may be helpful in analyses and investigations as these provide hints and leads to possible OSEC-related transactions.
It must also be noted that red flag indicators, suspicious triggers, and case typologies relative to OSEC are not limited to those included in the study. OSEC constantly changes and grows due to the development of information and communication technology. Moreover, it is advised that if a certain financial transaction is suspected to be associated with OSEC, it is highly encouraged that said transaction is reported to law enforcement or to the FIU, in the case of CPs. The presence of indicators, triggers, and mechanisms in the typologies must urge further monitoring, investigation, and reporting.
OSEC poses a high risk to money laundering due to the following reasons:
Global and domestic threats are high;
Vulnerabilities are present, and they continue to exploit the financial system;
The regulatory controls are not enough to reduce the inherent risk; and
The existing Public-Private Partnership Program (PPPP) framework is useful to a certain extent as only a handful of institutions are engaged.
A whole government approach is needed to combat OSEC and its money laundering impact.
To download the study, please click the link.
ARI No. 5, Series of 2020: Adoption of the Enforcement Action Guidelines
The AMLC releases the Enforcement Action Guidelines, providing procedures for the resolution of administrative cases at the level of the Compliance and Supervision Group of the AMLC Secretariat, prior to the filing of a formal charge under the Rules of Procedure in Administrative Cases (RPAC).
Enforcement actions are measures that are used when circumstances surrounding the non-compliance warrant a less severe form of supervisory action and the covered persons exhibit willingness to voluntarily address compliance issues within a reasonable period of time and without the necessity of filing a formal charge under the RPAC. These enforcement actions include, but are not limited to, the following:
- Compliance letter;
- Notarized compliance commitment;
- Look back;
- Compliance testing;
- Audit by an independent external auditor;
- Restitution of funds or property; and
- Public advisory.
The guidelines provide the option for the covered person to choose a reduced assessment, thereby paying an assessment lower than what would otherwise be computed pursuant to the RPAC if a formal charge is filed. A covered person may opt to settle for a reduced assessment during the assessment process and pay only 25 percent of the supposed penalty under Section 2, Rule IV of the RPAC.
Further, the guidelines encourage voluntary disclosures by covered persons of possible violation/s to ascertain the root cause of the issues involved and resolve them at the earliest possible time. A covered person voluntarily disclosing possible violation/s may be given only a warning or reprimand, or may be eligible for an exemption from monetary penalty, or significantly reduced assessment (reduction in assessment of up to 90 percent of the supposed penalty under Section 2, Rule IV of the RPAC), provided that the covered person took steps to immediately correct the possible violation/s and has showed that the root cause had been effectively addressed.
The guidelines will take effect 15 days after its publication in a national newspaper of general circulation.
To download a copy of the guidelines and flowcharts, please click the following links below.
- ARI 5, Series of 2020 - Approved Enforcement Guidelines (Original Signed)
- Annex A to the Enforcement Guidelines - Enforcement Action Procedures Flowchart
- Annex B to the Enforcement Guidelines-Reduced Assessment Flowchart
- Annex C to the Enforcement Guidelines-Voluntary Disclosures Flowchart
DOF, AMLC sign accord beefing up fight vs money laundering, terrorism financing
The Department of Finance (DOF) and the Anti-Money Laundering Council (AMLC) have renewed their firm commitment to step up joint efforts against money laundering and terrorism financing.
Finance Secretary Carlos Dominguez III and AMLC Secretariat Executive Director Mel Georgie Racela signed an updated memorandum of agreement (MOA) that aims to strengthen the cooperation and exchange of information between the two agencies in detecting, investigating, and prosecuting persons suspected of money laundering, terrorism financing, and other violations of the Anti-Money Laundering Act of 2001 (AMLA), as amended.
Witnesses to the accord signing were DOF Revenue Integrity Protection Service (RIPS) Undersecretary Bayani Agabin and AMLC Secretariat Commitments and Policy Group Deputy Director Alvin Bermido.
"This updated MOA underlines the unrelenting drive by the Duterte administration to flush out money launderers and terrorist financiers and stop the Philippine financial system from becoming a harbor for their nefarious activities along with other AMLA violations," Dominguez said.
The AMLC is the Philippines’ Financial Intelligence Unit (FIU). But unlike most FIUs, the AMLC is a hybrid FIU with authority to receive and analyze suspicious transaction reports, investigate money laundering and terrorism financing, and initiate the filing of forfeiture proceedings and money laundering cases. This is pursuant to the AMLC’s mandate under the AMLA, as amended, the Terrorism Financing Prevention and Suppression Act of 2012, and the Anti-Terrorism Act of 2020.
The DOF, on the other hand, is the government's steward of sound fiscal policy. It formulates revenue policies to ensure funding of critical government programs that promote public welfare and accelerate economic growth and stability.
Created under Executive Order (EO) No. 259, series of 2003, RIPS is the anti-corruption arm of the DOF, which under the MOA may request financial information from the AMLC to support its ongoing probe into suspected money laundering activities and other violations of the AMLA by officials and employees of the DOF and its attached agencies, including their family members. The RIPS is tasked to investigate allegations of corrupt practices of officials and employees of the DOF and all its agencies, such as the Bureaus of Internal Revenue (BIR) and of Customs (BOC). It investigates unusual or unjustified accumulation of wealth disproportionate to the earning capacity of government officials and employees; gathers evidence and files appropriate criminal, administrative, and civil complaints against errant government officials and employees; and assists in the prosecution of cases for the recovery or forfeiture of ill-gotten wealth.
The DOF and AMLC previously signed a MOA on information-sharing and capacity building on 8 July 2014 to facilitate the efficient investigation and prosecution of officials and employees of revenue-generating agencies, who engage in smuggling as well as graft and corruption. The revised MOA further institutionalizes mechanisms for the efficient exchange of information.
"As the country’s situation evolves, so does the fight against money laundering and terrorism financing. This MOA represents another chapter of collaboration and information-sharing between the DOF and the AMLC,” Racela said.