Financial firms preferred channels of alleged tax crimes — AMLC


The Anti-Money Laundering Council said financial institutions are the preferred conduits for transferring high-value earnings suspected of being linked to tax evasion.


In its “An Analysis of Suspicious Transaction Reports Links to Possible Tax Crimes,” report released on Wednesday, the Philippines’ financial intelligence unit said it conducted a study on the country’s potential exposure to tax crimes prior to the inclusion of tax evasion as a predicate offense to money laundering by focusing on selected suspicious transaction reports (STRs).


According to the report, “banks, investment houses, and insurance companies are the preferred channels in moving high-value proceeds with possible links to tax crimes.”


The number of STR submissions associated with SI3 is increasing, it said, from 35,786 in 2018 to 77,574 in 2020.


The AMLC defined SI3 as STRs that include the phrase “the amount involved is not commensurate with the client’s business or financial capabilities” as a justification for filing.


Banks, mainly commercial banks, as well as savings and mortgage banks, account for 70.62 percent (P49 billion) and 17.77 percent (P12.4 billion) of the total peso value, respectively.


Investment houses have 5.95 percent share (P4.2 billion), followed by insurance firms with 2.76 percent (P1.9 billion).


Money service businesses, pawnshops, and electronic money issuers came in fifth, sixth, and seventh, respectively, with 0.72 percent (P503 million), 0.69 percent (P483 million), and 0.54 percent (P378 million) of the total value associated with SI3.


The AMLC went on to say that, “essentially, BSP (Bangko Sentral ng Pilipinas) -supervised institutions overwhelmingly controlled the STRs associated with tax crimes.” The majority, 99.37 percent, were filed by BSP-supervised institutions (166,309 STRs).


Meanwhile, the AMLC also reported that cash deposits dominate the share of STRs relating to SI3, both in volume and value, respectively, accounting for 30.38 percent (50,841 STRs) and 36.44 percent (P25.5 billion).


The linked outflow transaction — cash withdrawal — is ranked sixth in terms of volume and value, with 8.83 percent (14,771 STRs) and 6.55 percent (P4.6 billion) correspondingly.


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