MONEY

LAUNDERING
OVERVIEW

Money-laundering is both a domestic and international menace, threatening

states, institutions and people. Considering the magnitude of this global problem,
States Parties to the United Nations Convention Against Corruption (UNCAC) have
adopted measures to combat money-laundering, terrorist financing and corruption. In
the Philippines, money-laundering was criminalized by the passage of Republic Act
9160, or the Anti-Money-Laundering Act of 2001, as amended.
NATURE AND CONCEPT
 ‘’Any act or attempted act to disguise the source of money or assets derived from criminal activity’’
 The goal of criminal act is to generate a profit for individual or group that carries out the act. Money
laundering is the processing of this criminal proceeds to disguise their illegal origin this process is of
critical importance as it enables the criminal to enjoy this profits without jeopardizing their source illegal
arm sales , smuggling and the different activities of organized crime such as; drug trafficking, human
trafficking, and prostitution that can generate large amounts of proceeds. Embezzlement, insider trading,
bribery and computer frauds schemes can also produce large profits and create the incentives to
‘’legitimize’’ the illgotten gains through money laundering when a criminal activity generates substantial
profits, the individual or groups that is involved must find a way to control the funds without attracting
attention to the underlying activity and the persons

 Money laundering is the illegal process of making large amounts of money generated from criminal
activities
 It is considered dirty and is laundered to make it look like clean that come from a legitimate sources.
money laundering can be described as ‘’the turn of dirty money into clean money’’
 It is the transfer of illegal assets into economic systems
HOW MONEY LAUNDERING
WORKS?
PLACEMENT
Dirty Money Enters the financial system

LAYERING
Transfer funds between offshore and onshore banks

INTEGRATION
-Money enters the economy through clean investment
- Purchase of luxury assets, financial, commercial and industrial investment
TRADITIONAL FORMS OF MONEY
LAUNDERING
 Smurfing
 Mules
 Shells
 Currency exchange
 Investing of commodities
 Discreetly investing and selling valuable assets
FORMS OF MONEY LAUNDERING IN
THE DIGITAL AGE
The use of the internet allows money launderers to make a new spin from the old
crime to evolved in the digitalized environment.
 The use of proxy servers and anonymizing software.
 Laundering through online auctions and sales
 Gambling website
 Virtual gaming sites
 Phishing scams
 Fraudster Scam
WHERE DOES MONEY LAUNDERING
OCCURS?
 Money laundering is a consequence of almost all profit generating crime,
practically it can occur any where in the world. Generally, money launderers tend
to seek out countries or sectors in which there is a low risk of detection due to
weak or ineffective anti money laundering programs.
 Money laundering activity may also be concentrated geographically according to
the stage the laundered funds have reached.
PREVENTING MONEY LAUNDERING
R.A 9160 -Anti Money Laundering Act of 2001 as amended By
 The Anti-Money-Laundering Council (AMLC), the Philippines’ Financial Intelligence Unit, is in the
forefront of this battle against the ill effects of money-laundering and terrorist financing.
 The Anti-Money Laundering Council (AMLC) has filed 85 criminal and civil cases involving about
P1.31 billion from January to August as the Philippines
 AMLC chairman and Bangko Sentral ng Pilipinas Governor Benjamin Diokno said the financial
intelligence unit continues to carry out improvements and initiatives against money laundering and
terrorism financing despite the challenges posed by the COVID-19 pandemic.
 The AMLC has also tied up with the Philippine National Police (PNP) for the creation of a “fusion
center” to foster cooperation and coordination to effectively prevent, control, detect, investigate and
prosecute terrorism financing and money laundering as well as its predicate crimes.
 Paris-based global dirty money watchdog Financial Action Task Force (FATF) reincluded the Philippines
in the gray list of jurisdictions under increased monitoring last June 25 after the country failed to address
the technical deficiencies raised by the Asia Pacific Group on Money Laundering (APG) under its
October 2019 Mutual Evaluation Report (MER).
THE ANTI MONEY LAUNDERING
ACT IN THE PHILIPPINES
 Criminalized money laundering Act.
 Creates a financial intelligence Unit
 Relaxes Strict Bank Deposits Secrecy Law
 Provides for Bank Inquiry and Seizure of dirty Money/ Property
 Provides for International Cooperation
 Under Suspicious transaction
- covered institution or individuals are mandated by the AMLA to submit
covered and suspicious transaction reports to the AMLC;
- one or more transaction covering 500, 000 and above in one day
Or any transaction involving;
 Un identified parties
 Amounts not commensurate to financial capacities involved parties
 Unlawful activities or predicate crimes
 Circumstances that deviates from the history of the involved parties
 The Philippines continues to register improvements in the compliance as it
adopted a whole-of-government approach with the implementation of the National
Anti-Money Laundering and Countering the Financing of Terrorism Strategy for
2018 to 2022 (NACS). The NACS continues to progress through its National
AML/CFT Coordinating Committee and its subcommittees.
 Annabella C. Ylagan was found guilty by a Regional Trial Court (RTC) in Quezon
City on 55 counts of money laundering. The fund diversion involved the creation
of a fake bank account and the transfer of P12 million.
EFFECT AND INFLUENCE OF
MONEY LAUNDERING TO
BUSINESS AND ECONOMIC
DEVELOPEMENT
The integrity of the banking and financial services marketplace depends heavily
on the perception that it functions within a framework of high legal, professional and
legal standard. Since a reputation is one of the most valuable assets of a financial
institutions. If funds from criminal activity can be easily processed through a
particular institution turns a blind eye to the criminal nature of such funds – the
institution could be drawn into active complicity with criminals and become part of
the criminal network itself. Evidence of such complexity will have a damaging effect
on the attitudes of other financial intermediaries and of regulatory authorities as well
as ordinary customers.
POLITICAL CONSEQUENCES OF
MONEY LAUNDERING
As with the damaged integrity of an individual financial institution, there is a
damping effect on foreign direct investment when a country’s commercial and financial
sectors are perceived to be subject to the control and influence of organized crime. Fighting
money laundering and terrorist financing is therefore a part of creating a business friendly
environment which is precondition for lasting economic and development.
Political consequences of Money Laundering
 eroding of the rule of law
 perceive safe heaven for illegal activities
 loss of credibility and influence globally
 lower government revenues
 negative public perception of the government
SOCIAL CONSEQUENCES OF
MONEY LAUNDERING ACTIVITIES
 Increased criminal activity
 Increased social and economic power to criminal
 Increased victimization
 Reduced confidence in private and public sectors
 Creates a positive fed back loop of criminal activity
ECONOMIC CONSEQUENCES OF
MONEY LAUNDERING
 Increased economic distortions
 Reduced domestic and international investment
 Higher illicit capital inflows (and higher legit outflows)
 Distorted market prices
 Unfair private sector competition
 Increased bank liquidity issues and solvency issues
 Reputational damaged and (financial sector)