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.