AMLC: Rising child porn poses risks to money laundering

Published September 16, 2020, 7:46 PM

by Lee C. Chipongian

The Anti Money Laundering Council (AMLC) said the increasing crime of online child pornography in the Philippines – estimated to be more than a $1 billion industry — is a money laundering and terrorism financing threat and is further escalating despite laws against cybercrime and efforts to rid the country of its reputation as a global child cybersex hub.

Photo credit: http://www.amlc.gov.ph/about-us

Based on its study, “Online Sexual Exploitation of Children: A Crime with a Global Impact and an Evolving Transnational Threat”, which examined the country’s risk exposure to the crime of online sexual exploitation of children (OSEC), the AMLC said these crimes “poses a high risk to money laundering” and in relation to terrorism financing, it said “there is not much evidence from the existing reports and cases gathered within the covered period as to the impact of OSEC to extremist activities” but it still needs to be addressed.

AMLC said the Philippines has become a child cybersex hub because of the following reasons: the global and domestic threats are high; vulnerabilities are present and they continue to exploit the financial system; and the regulatory controls are not enough to reduce the inherent risk.

AMLC said the fight against child pornography requires a “whole government approach” to “combat OSEC and its money laundering impact.”

AMLC also noted that the existing Public-Private Partnership Program (PPPP) framework which is “useful” needs more attention because while it could help against child cybersex, it could only do so to a certain extent as “only a handful of institutions are engaged.”

“The issue of OSEC necessitates the involvement not only of law enforcement but also the private sector, civil society, and the academe,” the study emphasized. At the moment AMLC is closely working with law enforcement units and industry partners through PPPP as well as international groups such as Egmont Secure Web to “shift from being reactive to becoming proactive in identifying financial transactions that can possibly be associated with OSEC.”

The AMLC study described OSEC as “progressing transnational issues” and its effect on the population has worsened due to the public health crisis and it has become “rampant” here and continues to evolve as a threat. “As the world struggles against (the) pandemic, many Filipino children are experiencing a ‘silent and secret’ pandemic—online sexual exploitation,” according to the study.

“OSEC is a horrific crime that causes significant harm to children and young adults, and even to wider society in which it pervades. It is a significant threat which is more likely to continue to increase in the coming years. The issue about OSEC has been one of the global emerging issues, and the Philippines is named in various studies as the global hotspot or the global epicenter of OSEC,” said AMLC.

From January to July this year, the AMLC investigated seven money laundering cases on child exploitation and five of these cases involved 533 “subjects of investigation”. There are also P17 million worth of illegal funds that were transacted through money service businesses, e-money transfer facility and banks. These “sexual offenders and facilitators” were tagged as coming from not just in the Philippines, but also Australia, Norway, USA, United Kingdom, Colombia, Romania, Pakistan, South Africa, India.

AMLC cited the United Nations International Children’s Emergency Fund which identified the Philippines as “a global epicenter of livestream sexual abuse trade of children” while a 2018 Internet Organized Crime Threat Assessment by the European Union Agency for Law Enforcement Cooperation said the Philippines is still “the most common country where the abuse takes place”. The report said this is because of the following: high Internet connectivity; growing availability of relatively cheap smartphones and tablets; widespread use of the English language; a high number of relatively poor families; and perceptions that do not see livestreaming of child sexual abuse as being in conflict with social norms.

AMLC said the effect of COVID-19 pandemic to OSEC has been indicated by the number of cases during the lockdown, which rose by 264 percent based on a Department of Justice report. Its Office of Cybercrime showed that the National Center for Missing and Exploited Children reported 279,166 cases March to May compared to 76,561 same period last year.

The suspicious transaction report (STR) submissions also increased March and May, said AMLC, with 5,512 and 5,634, respectively, versus 110 and 597 STRs in March and May 2019.

The study strongly recommended what it called a collaborative multisector response to combat OSEC. “There is a high probability of achieving desired results if government, law enforcement, professionals, such as teachers and health workers, the private sector, and civil society focus on one goal in combating OSEC through effective coordination and collaborative activities,” said AMLC.

The creation of an “all-encompassing” law, added AMLC, will plug the gaps in the existing legislations. This law will define and include the “full range of OSEC activities” and these are: recruitment and online technology; stages of commission; participation in the offense; and corresponding penalties.

“Additionally, imposition of stiffer penalties and sanctions may discourage possible facilitators of OSEC,” said AMLC.

 
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