Philippines one of 66 nations for drug money laundering—US report

MANILA, Philippines—The Philippines has been named by the US Department of State as one of the 66 major drug money-laundering countries in the world.

In its 2012 International Narcotics Strategy Report, the State Department’s Bureau of International Narcotics and Law Enforcement Affairs (BINLEA) points out that although the country is “not a regional financial center,” it “continues to experience an increase in foreign organized criminal activity from China, Hong Kong and Taiwan.


The report also called the Philippines one of the agency’s “jurisdictions of primary concern.”

The same report, posted on the website of the US Embassy in Manila, also disclosed that “insurgency groups operating in the Philippines partially fund their activities through local crime, kidnapping for ransom and the trafficking of narcotics and arms, and engage in money laundering through ties to organized crime.”


“The proceeds of corruption are also a source of laundered funds,” the report also said.

Besides the Philippines, other members of the Association of Southeast Asian Nations on the list of drug money-laundering nations are Thailand, Indonesia, Cambodia, Singapore, and Myanmar (formerly Burma).

Also on the list are the following countries: Afghanistan, Australia, Brazil, Canada, China, Colombia, France, Germany, Greece, Hong Kong, India, Iran, Iraq, Israel, Italy, Lebanon, Macau, the Netherlands, Pakistan, Russia, Somalia, Spain, Taiwan, United Arab Emirates, United Kingdom, the US and Venezuela, among others.

The report also identified the 22 major illicit drug production and drug transit nations: Afghanistan, the Bahamas, Belize, Bolivia, Burma, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, India, Jamaica, Laos, Mexico, Nicaragua, Pakistan, Panama, Peru, and Venezuela.

Named by the report as the 15 major sources of essential chemicals used in the production of illegal drugs are Argentina, Brazil, Canada, Chile, China, Germany, India, Mexico, the Netherlands, Singapore, South Korea, Taiwan, Thailand, the U, and the US.

The same report said that even if the Philippines has been a member of the Asia-Pacific Group on Money Laundering for some time now, “investigations by the (regional body’s) Financial Intelligence Unit (FIU) continue to be constrained by limited authority to access bank information.”

“Except in instances of serious offenses, such as kidnapping for ransom, drugs and terrorism-related activities, the FIU is required to secure a court order to examine bank deposit accounts related to unlawful activities enumerated in the Anti-Money Laundering Act. In addition, a Supreme Court ruling prevents ex parte inquiry into bank accounts,” it said.


But the FIU “can seek an ex parte freeze order from the Court of Appeals before seeking authorization to inquire into bank deposits. The FIU also must obtain a court order to freeze assets, including those of terrorists and terrorist organizations placed on the United Nations 1267 Sanctions Committee’s consolidated list and the lists of foreign governments.”

“This requirement is inconsistent with the international standard, which calls for the preventive freezing of terrorist assets without delay from the time of designation,” said the agency as it asked the Philippines to “enhance the FIU’s access to financial records and ensure it can rapidly freeze terrorist assets” and “criminalize terrorist financing as a stand-alone offense.”

Earlier, the BINLEA said the Philippines faced “challenges in the areas of drug production, drug trafficking and internal drug consumption.”

It said the Manila government “takes drug trafficking and drug abuse seriously, and has made substantial efforts to address these problems.”

However, it said “lack of law enforcement resources, the slow pace of judicial and investigative reforms and lack of law enforcement inter-agency cooperation continue to hamper government efforts to investigate and prosecute higher echelons of drug trafficking organizations operating in the Philippines.”

According to the US agency, the primary threat faced by the country “continues to be the importation, manufacture and abuse of methamphetamine hydrochloride, also known as shabu.”

It also reported that “numerous arrests in Asia and South America showed an increasing trend of Philippine citizens acting as drug couriers employed by international drug syndicates.

Filipino drug mules “typically carried drugs from South America to Asia although the drugs were generally not destined for the Philippines.”

Drug smuggling through the country’s international airports “remains a problem,” said the agency.

Citing the Dangerous Drugs Board, the agency reported that “8 percent of drug cases here are dismissed before going on trial, 7 percent result in conviction, 8 percent result in acquittal, while 76 percent remain unresolved.”

Drug cases in the Philippines are “often dismissed due to technicalities, including illegality of arrests, non-appearance of witnesses, mishandling of evidence, and unreliable police laboratories,” according to the report.

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TAGS: Crime, drug trafficking, Global Nation, money laundering, Philippines, US Department of State
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