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2) [ANNUAL REPORT HON, AMANDO M. TETANGCO, JR. Chalrman, Anti Money Laundering Couneil Governor, Bangko Sentral ng Pilipinas MESSAGE The year 2014 was 3 good onc for the Philippine economy daspite challenges brought about by a series of natural disasters in the year that preceded it. The country was resilient and continued on its growth track, Sustaining this steady econamic growth is the strong performance ofits banking system, with public confidence in banks remaining intact, A significant partner in maintaining this confidence is the Anti-Money Laundering Council (AMLC}, as ft has consistently delivered on its mandate of implementing Republic ‘Act No. 9160, oF the “Anti-Money Laundering Act of 2001” (AMLA), as amended by Republic ‘Act Nos. 9194, 10167 and 10365, and Republic Act No, 10168, "The Terrorism Financing Prevention and Suppressian Act of 2012.” In 2014, the President of the Philippines, through Memorendum Circular No. 64 dated 20 June 2014, designated the AMLC as the lead agency of the inter-agency Working Group enjoined to accomplish the objectives and completion of the Maney Laundering and Terrorism Financing (ML/TF) National Risk Assessment (NRA) process ia the Philippines, Through its Executive Director, the AMILC was empowered ta issue operational guidelines and instructions to identify and evaluate the sources and methods of money laundering and terrorism financing, the weaknesses in the systems, and other vulnerabilities that have an Impact, either direct or increct, on the country conducting the assessment, The objective is for the assessment to be comprehensive and provide an overall picture af our country’s MUTF risks. Thus, the results of the national MIL/TF risk assessment can be 2 valuable input Jn the formulation or calaration of national AntiMeney Laundering/Cambating the Financing of Terrorism [AML/CFT) policies and actian plans. Another significant achievement of the AMLC in 2014 was its proposal to Congress ‘that casinos be included in the urview of covered persons ar reporting entitles under the AMILA, 2s amended. The proposal ims to address a remaining strategic deficiency noted by ‘tne Financial Action Task Force's International Coogeration Review Group. The amendments were introduced under House Hill No. 3876 and Senate Bill No. 2106 to strengthen anti- money laundering efforts and to combat the financing of terrorism in the country. These bfopased amendments attest to staunch political wil and the AMIC’s partnership with Congres to fulfil the country’s (AML/CFT} action ple. In 701, the AWLE was again represented in the international fight in AMIL/CET through the nemination and appointment of the Fxecutive Director af ils Secrelariat as one of the Co-Cheirs of the Financial Action Task Force international Cooperation Review Group- Asia-Pacific Regional Review Group (FATE ICRG-APRRG). The FATF ICRG-APRRG analyzes high-risk jurisdiction In the Asia-Pacific and recommends specific actions to address ML/TF disks emanating from these jurisdictions, In presenting this 2014 Aanual Report, | extend congratulations to the AMLC Secretariat and our national and global stakeholders in the “ight against money laundering ‘With these partnerships ia mind, truly, the AMLC is optimistc that It will continue to work toward the implementation of legislative, regulatary, and institutional reforms to improve the Philippine AMIL/CFT regime and strengthen compliance with international standards. HON. TERESITA J. HERBOSA Member, Anti-Money Laundering Council Chairperson, Securities and Exchange Cornmission MESSAGE Today's rapidly evolving glabal and domestic AML/CET regime has posed Unprecedented challenges and opportunities to our country’s governance, security, and development, Undoubtedly, beth past and present events have shown how, with heightened awareness, our domestic rogime had to build up the required capability and capacity to counter the gaps and challenges encountered along the path to complying with international standards. Gauging by our past year's performance, we have worked toward establishing a local imprint to our AML/CFT regime imbued with state-level Initlatives, Notably, good governance has been our core concern. Strategic imperatives have been operationally executed at the national evel within the current whole ef nation approach, Within this structure, the state-level initiatives have been domestically carried out in the drive for effective governance across all sectors (both public and private) and externally integrated by the State with regional and international policy initiatives ‘As part of the international coalition to combat beth ML and TF, we have worked to broaden the practice of dealing with internal threats squarely and in isolation within our domestic confines. In its stead, our domestic initiatives have become the product of International intiatlves, thus the comprehensive approach. In linking with the whale of ration, we have aligned with the real ML and TF challenges as seen in the external environment. hard toward executing AMLICFT initiatives in 2 comprehensive way, a8 analogously executing multiple aaproaches with the optimum employment ofall departments, agencies, and non-government actors (With enhanced cepabiity and capacity, | trust that our current to future AMLICFT regime response initiatives shall result to sustaining long-term public value by conteibuting to the national economic prosperity AP HON, EMMANUEL F. DOOC ‘Member, Anti-Money Laundering Council Commissioner, Insurance Commission MESSAGE The AMILC remains committed to the preservation of the integrity of the financial system, and ta the vigorous fight against the twin evils of money laundering and financing of terrorism, in accardance with internationally acceptable standards Since enactment of the AMLA In 2001, the AMLC has been instrumental in transforming the Philippines from a blacklisted into a cooperative state in the international financial community. In fact, the AMLC launiched its national risk assessment in 2014, whose results may further improve the AMLC’s future performance. This comes in the wake of the decision of the FATF to remove the Philippines from the list of vulnerable jurisdictions, based on the AMILC’s achievements in policy-making, financial investigations, prosecutions, and freezing and forfeiture of suspected money launderers’ assets. Moreover, the AMLC has actively promoted inter-agency cooperation. Its unique mandate encompasses both criminal and financial activities, enabling It to conteibute to the preservation of peace and order, and to the promotion af financial stability and economic. 4growth, hand in hand with other gavernment agencies, Because the insurance Industry is a key player in the financial system, we at the Insurance Cammission (IC) remain firm in our cooperation with the AMLC, especially at @ time when good governance has become # national buzzword. We are proud of the Fact that, in an upward crescendo, insurance companies and others under the IC's jurisdiction ‘are coming to a better understanding of their crucial role in preserving the financial system's integrity ‘8s we look farward to the coming year, the Filipino peoale can confidently face the fusure, knowing that the AMLC—rny fellow members and |—wil continue to put up a courageous tight, without fear or favor, toward a clean financial system, Geo uw ATTY. JULIA C. BACAY-ABAD Executive Director Anti-Money Laundering Council Secretariat MESSAGE ‘The Government's efforts, through the AMILC, in combating money laundering and its predicate crimes and terrorism financing, have intensified through the years, and 2014 has been a very challenging year for the AMLC and ils Secretariat. The AMLC has been very vigorous in pursuing its mandate under the AMLA, as, ‘amended, and the Terrorism Financing Prevention and Suppression Law of 2012, as it has filed more money laundering cases than the previous years. In 2014, the AMLC conducted 32 bank inquiries, of which 28 were done through court orders granted by the Court of Appeals. This is 22 more than the bank inquiries conducted in 2013, Alsa in 204, the AMC filed sine petitions for the issuance of freeze order against monetary instruments or properties that ae in any way related ta predicate crimes or ‘money laundering offense, which is more that the six petitions fled In 2013, The AMLC has also conquered the international AML/CFT arena through the appointment of the Philippines as a Co-Chair ofthe FATE ICRG-APRRG during the June 2024 FATE Plenary. I san indication that the country's standing in the global fight against money laundering and terrorist financing is recognized in the international community, particularly the Asia-Pacific Region. While the Philippines has just recently exited the ICRG process, its being appointed to a key leadership role reflects the country’s credibility and its abilty to co-lead in the worldwide campaign against money laundering and terrorist financing. wn Moving forward, the Council and its pariners need a stronger and more focused strategy to address the growing challenges assaciated with money laundering and terrarist financing. On 20 lune 2014, an inter-agency Working graup, led by Ihe AMILC, was created to undertake = National Risk Assessment (NRA} study for the purpose of developing a ciske ‘based AMIL/CFT slrateyy Lo Facilitate allocation of available resources in the most effective ‘way to contro, mitigate, and eliminate the idensified risks. While the study is stil on-going, high points have deen reached. We look forward to the presentation of the results in the near future Indeed, 2014 saw the AMLC as a stronger and more effective financial inteligence lunit, With the continuous support of our partners, the aullaok far the country’s AML/CFT regime remains bright despite the challenges ahad, va THE ANTI-MONEY LAUNDERING COUNCIL General Information and Organization In line with the poliey of the State to protect the integrity and confidentiality of bank accounts and to ensure that the Philippines shall not be used as a money laundering site for the proceeds of any unlawful activity, the Anti-Money Laundering Council (AMLC) was created pursuant to Republic Act No, 9160, otherwise known as the “Anti-Vioney Laundering Act of 2001" (AMLA). “The AMLC's main task is to Implement the AMLA, as amended by Reaublic Act Nos, 9194, 10167 and 10365, and Republic Act No. 10168, otherwise known as the “Terrorism Financing Prevention and Suppression Act of 2012" (TF Suppression Act}, ‘The AMLC Is the Philippines’ Financial Intelligence Unit (FIU) similar to the Financial Crimes Enforcement Network (FinCEN) of the United States, the Financial Transaction and Regorts Analysis Centre (FINTRAC) of Canada, and the Australian Transaction Reports and [Analysis Center (AUSTRAC) of Australia, The AMLC is often referred to as 3 hybrid-type of FIU because unlike 3 regular FIU, it has other functions, such as investigative and prosecutorial powers. ‘The AMLC is composed af the Governor of the Bangko Sentral ng Pilipinas (BSP) as Chairman and the Commissioner of the Insurance Commission {IC} and the Chairperson of tthe Securities and Exchange Commission (SEC) as Members. It acts unanimously in the discharge ofits functions. BSP Governor Chairman es <0 SEC Chairperson Insurance Commissioner Member ‘Member The ADM |