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The Philippines Second National Risk Assessment on Money Laundering and Terrorist Financing

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The Philippines Second National Risk Assessment on Money Laundering and Terrorist Financing 2nd NRA 2017 THE PHILIPPINES SECOND NATIONAL RISK ASSESSMENT ON MONEY LAUNDERING AND TERRORIST FINANCING 2nd National Risk Assessment – Philippines 2015 -2016 Manila, 2017 The National Money Laundering and Terrorist Financing (ML/TF) Risk Assessment of Philippines has been conducted as a self-assessment by Philippine Authorities, using the National ML/TF Risk Assessment Tool that has been developed and provided by the World Bank. The data, statistics, and information provided and populated into National ML/TF Risk Assessment Tool templates, and any other finding, interpretation, and judgment under the scope of National Risk Assessment process completely belong to the Philippine authorities and do not reflect the views of World Bank, its Board of Executive Directors or the governments they represent. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved. Page 1 of 300 2nd National Risk Assessment – Philippines 2015 -2016 Manila, 2017 Table of Contents INTRODUCTION ………………………………………………………………………………………………………………………..… 5 OBJECTIVES ………………………………………………………………………………………………………………………………... 5 NRA PROCESS …………………………………………………………………………………………………………………………..… 6 NRA WORKING GROUP …………………………………………………………………………………………………………….... 6 NRA RESEARCH AND ASSESSMENT METHODOLOGY ………………………………………………………………..…. 7 LIMITATIONS OF THE ASSESSMENT……….…………………………………………………………………………………….12 I. OVERALL THREAT ASSESSMENT ............................................................................................ 13 THREAT ARISING FROM PREDICATE CRIMES ................................................................................... 13 I. Tax Crimes ......................................................................................................................... 14 II. Smuggling .......................................................................................................................... 15 III. Copyright Infringement/Intellectual Property Law Violations .......................................... 20 IV. Illegal Manufacture and Possession of Firearms, Ammunitions and Explosives .............. 23 V. Environmental Crimes ....................................................................................................... 24 VI. Investment Fraud and Estafa ............................................................................................ 27 VII. Violation of the Dangerous Drugs Law .............................................................................. 29 VIII. Plunder and Violations of the Anti-Graft and Corrupt Practices Act ................................ 36 IX. Web-related Crimes .......................................................................................................... 39 X. Trafficking in Persons ........................................................................................................ 41 XI. Kidnapping for Ransom ..................................................................................................... 45 XII. Other Unlawful Activities/ Predicate Offenses ................................................................. 44 SECTOR THREAT ANALYSIS ............................................................................................................... 45 1. Banks ................................................................................................................................. 46 2. Money Service Businesses (MSB) ...................................................................................... 47 3. Designated Non-Financial Businesses and Professions (DNFBPS) .................................... 47 4. Non-Profit Organization (NPO) .......................................................................................... 48 5. Securities Sector ................................................................................................................ 48 6. Insurance Sector ................................................................................................................ 49 THE LEVEL OF EXTERNAL THREAT .................................................................................................... 49 OVERALL NATIONAL RISK ................................................................................................................. 51 ACTION PLAN ................................................................................................................................... 51 II. NATIONAL VULNERABILITY ................................................................................................... 54 EXECUTIVE SUMMARY ..................................................................................................................... 54 INTRODUCTION ................................................................................................................................ 54 DATA AND INFORMATION COLLECTION .......................................................................................... 57 AML COMBATING CONTROLS ASSESSMENT ................................................................................... 58 OVERALL NATIONAL VULNERABILITY ............................................................................................... 97 ACTION PLAN ................................................................................................................................... 97 III. BANKING SECTOR VULNERABILITY ...................................................................................... 101 EXECUTIVE SUMMARY ................................................................................................................... 101 INTRODUCTION .............................................................................................................................. 101 DATA AND INFORMATION COLLECTION ........................................................................................ 102 SECTOR VULNERABILITY ASSESSMENT .......................................................................................... 103 ACTION PLAN ................................................................................................................................. 129 Page 2 of 300 2nd National Risk Assessment – Philippines 2015 -2016 Manila, 2017 IV. SECURITIES SECTOR VULNERABILITY ................................................................................... 131 EXECUTIVE SUMMARY ................................................................................................................... 131 INTRODUCTION .............................................................................................................................. 131 DATA AND INFORMATION COLLECTION ........................................................................................ 132 SECTOR VULNERABILITY ASSESSMENT .......................................................................................... 133 ACTION PLAN ................................................................................................................................. 152 V. INSURANCE SECTOR VULNERABILITY .................................................................................. 154 INTRODUCTION .............................................................................................................................. 154 DATA AND INFORMATION COLLECTION ........................................................................................ 159 SECTOR VULNERABILITY ASSESSMENT .......................................................................................... 161 ACTION PLAN ................................................................................................................................. 172 VI. OTHER FINANCIAL INSTITUTIONS ....................................................................................... 173 EXECUTIVE SUMMARY ................................................................................................................... 173 INTRODUCTION .............................................................................................................................. 173 SECTOR VULNERABILITY ASSESSMENT .......................................................................................... 174 A. THE NON-STOCK SAVINGS AND LOANS ASSOCIATIONS (NSSLAS) ......................................... 175 B. MONEY SERVICE BUSINESSES (MSBS) .................................................................................... 180 C. PAWNSHOPS (WITH COROLLARY BUSINESSES) ..................................................................... 182 D. LENDING AND FINANCING COMPANIES ................................................................................ 190 E. NON-BANK E-MONEY ISSUERS .............................................................................................. 197 ACTION PLAN ................................................................................................................................. 204 VII. DESIGNATED NON-FINANCIAL BUSINESS AND PROFESSIONS ............................................... 206 EXECUTIVE SUMMARY ................................................................................................................... 206 DATA AND INFORMATION COLLECTION ........................................................................................ 208 A. CASINO SECTOR .....................................................................................................................
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