Philippines to Crush Bulk-Cash Smuggling

The House of Representatives of the Philippines filed a bill in March 2020 aimed at curbing bulk-cash smuggling. The proposed Anti-Bulk Cash Smuggling Act of 2020, would impose reporting requirements and demand prior clearance for those transporting PHP500,000 or more in cash or using other monetary instruments. If passed, those caught violating the requirements could face several years in prison.

Government employees who facilitate smuggling would be prosecuted, fined and may face prison time as well. The legislation comes just a few days after the country’s Department of Finance announced that from mid-2019 to March 2020, two Chinese organized crime syndicates, “Rodriguez” and “Chinese,” have smuggled into the country $200 million and $168 million, respectively. Further, a total of approximately $180 million was brought into the Philippines from China just from December to February. The “Singapore” group smuggled in PHP2.6 billion, and “Hong Kong” group PHP2.3 billion.

Much of this cash has been brought in through couriers, who make trips to and from China a few times a week and avoid proper inspection at the airport with the help of corrupt police or military escorts. In filing House Bill No. 6516 Albay Rep. Joey Salceda said bulk cash smuggling is a serious national security risk as much as it is a risk to the country’s institutions.

“Bulk cash smuggling suspected to be in the billions of pesos is enough to shift political fortunes and corrupt institutions in the country facilitating crime and other illegal activities,” Salceda said. He warned that if the country’s financial authorities are unable to respond to bulk cash smuggling decisively, the risk becomes greater that the Philippines would get delisted from the Financial Action Task Force (FATF) for being a high-risk base for terrorism financing and money laundering.

“This delisting would have serious implications on the ability of our financial institutions to expand and do business transnationally. This would also carry broader dangers to our credit standing internationally, making the country a riskier borrower of funds,” he said.

The bill seeks to expand the coverage of the Anti-Money Laundering Act of 2001 to include one-time cash transports of more than PHP500,000 at any one time. It shall also empower the Anti-Money Laundering Council (AMLC) to define a cumulation of closely-related events that would constitute “one-time”. The bill proposes to criminalize bulk cash smuggling to ensure that the evasion of a paper trail for cash transfers will not be tolerated.

A person convicted of a currency smuggling offense shall be imprisoned for not less than 7 years and not more than 14 years. There shall also be a civil forfeiture in favor of the Philippines of assets related to cash smuggling.

“In view of the urgency of the need for a response to the currently unmitigated influx of bulk cash into the Philippines, and given the critical importance of a policy response to the threats that bulk cash smuggling pose to peace and order, national security, and institutional and financial integrity, the immediate enactment of this bill is urgently sought,” he said.

Finance Secretary Carlos Dominguez III has indicated willingness to work with legislators anew for the proposed Anti-Money Laundering Act (AMLA) reforms, as he cited loopholes in the existing law. “Our laws have no teeth to investigate and prosecute these activities effectively. We don’t have enough tools to know where all this money is going, without being hamstrung by stringent bank secrecy laws,” he added. Dominguez said it is imperative to amend AMLA, which remains a weak tool against money laundering and other unlawful activities.” (PNA)

Published by Kemman

Financial Crime Compliance (FCC) professional. Passionate about AML/CTF, Sanctions, ABC, KYC, CDD. Member of the World Advisory Council Association of Certified Fraud Examiners-ACFE. Member of the African Task Force Committee - ACAMS. Presenter at International Conferences-ACAMS&ACFE. Certified Fraud Examiner-CFE. ACFE & ACAMS. Certified Anti-Money Laundering Specialist-CAMS. Certified Anti-Bribery and Corruption-ABC. Founder member of Institute of Directors (IoD) Zambia Chapter. Founder - Managerial Accountability & Transparency. Two-term of two years Chairperson of the Bankers Association of Zambia Fraud Prevention and Security Committee. SADC and COMESA Consultant on Crime & Corruption Prevention & management Strategies. Former Area Head for Southern & East Africa. Professionally trained “trainer of trainers” & core facilitator. Proficient with proven track record of exceptional abilities in management and leadership for performance. Corporate Governance, capacity building, Institutional & Organizational development, business process re-engineering. Technical expertise is coupled with excellent interpersonal, team building, communication and presentation skills.

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