Inept Anti-Money Laundering Council

The crimes that have been attributed to Philippine offshore gaming operators (Pogos), among them human trafficking, financial scams, prostitution, and torture, now includes money laundering. The crime involves transforming proceeds from illegal activities into funds that ostensibly come from legitimate sources.

When government operatives raided last March the 10-hectare Pogo complex in Bamban, Tarlac, they found 37 buildings consisting of a shopping mall, condominiums, and other commercial establishments. It was a Chinese community by itself, with signage in Chinese characters, that was separate and distinct from the local government unit.

In a TV interview, Sen. Sherwin Gatchalian said some P6.1 billion was spent to construct those buildings without any record of how the money was brought into the country, and who constructed the buildings. According to Gatchalian, officials of the Anti-Money Laundering Council (AMLC) who were asked in an executive session about that money inflow, could not say how the funds came in, who received them, and who dispensed them during the construction stage.

High-level membership

The government office tasked by law to monitor and prevent the entry of “dirty money” into the Philippines unabashedly admitted that it was clueless on the provenance and disposition of that huge sum of money.

The AMLC is composed of the governor of the Bangko Sentral ng Pilipinas (BSP) as chair, with the heads of the Securities and Exchange Commission and the Insurance Commission as members. It has its own budget allocation from Congress which is separate from those of the offices they represent. With the BSP governor at its helm, it also often receives generous financial assistance from the cash-rich financial institution. The high-level membership is meant to show that the government means business in combating money laundering, which has been proven to be the source of funding for heinous crimes in the country and other parts of the world.

Not chicken feed

The law has given the council ample powers to monitor the operations of all banks, financial intermediaries, and business entities in the Philippines that engage in financial transactions to make sure their facilities are not, wittingly or unwittingly, being used as conduits for money laundering. It also has the powers to, among others, freeze the bank deposits and other financial resources it has reason to believe are about to be or are being used for unlawful purposes.

So it boggles the imagination how P6.1 billion was able to enter the country and be disbursed for building so many Pogo structures without the AMLC being alerted to it or, at the minimum, getting a whiff of it. That amount is not chicken feed or something that can be nonchalantly ignored by government regulators.

Pogo mules

It is doubtful that the amount was brought into the country in cash by Pogo mules because of the high risk of it being detected by the Bureau of Customs. In all probability, the money was withdrawn from bank accounts in different banks in amounts below the threshold that would require a bank to report it to the AMLC as a suspicious transaction. But doesn’t the AMLC have the algorithm that foreign banks use to monitor a series of transactions below the suspicious threshold?

By this time, some 23 years after the Anti-Money Laundering Act was enacted, and countless anti-money laundering seminars attended by its staff since, the AMLC would have gained enough experience and expertise to detect various ways by which crime syndicates conduct money laundering operations.

Failed mission

Whatever means were used to bring in the P6.1 billion Pogo funds, it is apparent that the AMLC has grievously fallen short on its mission and mandate. Considering that Pogos have been in operation since 2003 but were only regulated during the Duterte administration in 2016, and have been flaunting their wealth in the manner by which they operate, there had been more than enough red flags for the AMLC to check if their activities do not run afoul of our anti-money laundering laws. It’s also a puzzler how, in spite of Pogos openly advertising their online gaming operations (which is a euphemism for gambling), the AMLC has turned a blind eye to them. As it does on casinos it is obliged to monitor for possible money laundering activities.

Maybe the council members and staff had been too busy attending anti-money laundering seminars abroad (read: junkets), to gather enough intelligence about the P6.1 billion spent on the Pogo hub in Bamban, Tarlac? Obviously, it must realign its priorities and get to work if it were to prove true to its name.