AsPac group cites RP’s anti-money laundering efforts

The Asia Pacific Group on Money Laundering (APG) expressed satisfaction over the anti-money laundering efforts of the Philippines but officials still expressed concern over the movement of dirty money through informal remittance agents.

The APG concluded its ninth annual meeting in Manila yesterday, saying that the evaluation of its member nations have revealed positive results although significant work still needed to be done.

APG co-chairman Mick Keelty told reporters yesterday that the group was heartened by the Philippine government’s aggressive efforts to curb money laundering.

However, the APG said it is studying the movement of funds through designated non-financial businesses and professions (DNFBPs) such as casinos, non-profit organizations, real estate developers, alternative remittance channels and even dealers of jewelries and valuable items such as precious stones, metals and art.

"These businesses are continuously evolving and we are studying exactly how they work, how money laundering happens and how we can stop them," Keelty said.

"Casinos today, for example, involve not just people gambling in the actual physical locations but also online betting," he pointed out. In the Philippines, he said casinos have reporting methods that establish a paper trail for casino customers but the same is not true in all jurisdictions.

The APG said it is also specifically concerned over the use of non-bank and non-financial fund channels that have been exploited by criminal and terrorist elements to move their funds around.

In the Philippines, the use of informal fund remittance agents were a concern but the share of these operations have diminished significantly since, accounting for only 15 percent of total remittances going into the country.

Fifteen percent, however, is still about $2.3 billion dollars that do not go through banks and other financial institutions and could possibly go to terrorist activities and the like.

APG head of secretariat Eliot Kennedy said alternative remittance agents, non-profit organizations and charities are particular problems where APG members have to strengthen standards.

"Our recommendations to our members is to institute procedures for identification, perhaps a risk-based approach where the main goal is to stop anonymous transfers," Kennedy said.

However, the APG admitted that it could only recommend to governments and full-compliance with the recommendations of the Group and the Paris-based Financial Action Task Force on Money Laundering (FATF) would have to be initiative-based.

The Philippines has complied with the major recommendations of the APG and the FATF but it has yet to comply with the rest of the so-called Forty Plus 9 Recommendations.

These recommendations would involve the significant expansion of the list of predicate crimes that could be prosecuted under the Anti- Money Laundering Act (AMLA), including graft and corruption, anti-labor practices and even violations of environment laws.

According to Keetly, however, the APG could not pressure its member nations to comply with these recommendations, saying that respective governments would have to comply at their own pace.

"This meeting was concerned precisely with the progress of compliance of its members but we are aware that different countries would have different capacities to adjust to the standards set by the APG," he explained.

"It’s an evolutionary process and not everyone will be on the same level of compliance," he said.

The Philippines, in particular, is only beginning to make headways in the implementation of the AMLA, winning its first conviction only this year after the law was passed in 2001 and amended in 2003.

"That is proof of how much work has been done here and in other countries, developments have also been significant," he said.

Keelty said President Arroyo was also the first head of state to ever attend an APG gathering and this, he said, indicated the level of concern that the Philippine government is demonstrating in efforts to curb money laundering.

"The Philippines has a very high level of interest in these efforts," he said. "It is not our job to lobby for reforms, however, that will be the job of the respective governments."

However, both the APG and the FATF as well as individual financial intelligence units like the US Fincen have been instrumental to the passage of the AMLA and the creation of the Anti Money Laundering Council (AMLC).