Country at ‘medium’ risk for money laundering

Money laundering remains a serious threat to the Philippines, which has had its share of embarrassing incidents in the past such as the Bangladesh central bank heist where US$81mil (RM335mil) in stolen money vanished in local casinos in 2016.’

One sector that is particularly vulnerable to cybercriminals is the local capital market. According to an assessment report released last week by the Securities and Exchange Commission (SEC), the capital market is at “medium” risk of being exploited for money laundering, especially as the rise of digitalisation has made it easier for criminals to avoid detection and conceal their financial pipeline.

This was reflected in the 774 suspicious transaction reports involving 11.5 billion Philippine peso (RM993mil) received by the Anti-Money Laundering Council from 2017 to 2019. The majority of the transactions were suspected to have been made for the commission of crimes here.

Among the so-called predicate crimes mentioned in the SEC report are plunder, graft and corruption practices, drug trafficking, as well as fraudulent practices and code violations, which govern the capital market. Predicate crimes are components of larger crimes such as racketeering, terrorist financing and money laundering.

The rating was based on the 2021 Sectoral Risk Assessment for the Securities Sector conducted by the SEC with technical assistance from the Asian Development Bank.

It covered all of the 304 stockbrokers and dealers, investment houses, securities underwriters, financing companies, government securities dealers, investment company advisers and mutual fund distributors supervised by the SEC.

While the assessment found “extremely low or nil” risk as far as terrorist financing was concerned, the SEC noted that the sector attracted various criminal threats with moderate levels of sophisticated tactics and methods to commit offences linked to money laundering. — Philippine Daily Inquirer/ANN

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