PH saw surge in child pornography-linked money laundering during pandemic – AMLC

MANILA, Philippines – Authorities have detected an increase in financial transactions linked to the online sexual exploitation of children in the country in recent months as the economic challenges brought about the coronavirus pandemic drove more people into child pornography.

Thus said the Anti-Money Laundering Council in a study it released on Wednesday, detailing the high threat level posed by this illegal activity on Philippine society, and noting that present financial safeguards and regulatory controls are insufficient to counter this practice.

“Corollary to several news reports about the increasing number of cases in the Philippines brought about by the pandemic, a surge in the number of [suspicious transaction report] submissions was observed for the months of March and May 2020, with 5,512 and 5,634 suspicious transactions reported, respectively,” the report said.

This compared with only 110 and 597 suspicious transaction reports during the same period in 2019.

Similarly, the noted surge in the number of transactions flagged by financial institutions for January and February 2020 can also be linked to the pandemic in conjunction with the efforts of the AMLC, other relevant agencies, and the private sector in spreading awareness on child pornography, the agency said.

Sexual predators go online

The report also suggested that global travel restrictions brought about by the pandemic pushed many would-be sexual predators and offenders online.

The report also noted the increase in the volume of small financial transactions worth P1,000 to P3,000 during this period, accounting for 45.2 percent of the total amount linked to child pornography. This was higher than the 40 percent average for these amounts during the preceding five years.

The second-biggest transaction range are those for money transfers of P3,001 to P5,000 which account for 23.2 percent of all suspicious movements and P5,001 to P10,000 which account for 21.4 percent.

All told, the AMLC report said the agency received 20,448 suspicious transaction reports in the first half of 2020 related to child pornography, which is almost double the 10,633 reports for the same crime for the entire 2019.

The agency has so far investigated seven money laundering cases related to child pornography referred to it by law enforcement agencies. Five of those cases involved 533 subjects of investigation, which transacted some P17 million in illegal funds.

“Financial institutions used in the transactions were mostly money service businesses, and, in some cases, e-money transfer facility and banks,” AMLC said.

“In impoverished communities, livestreaming offers a financial incentive for criminal networks, which creates a commercial element for online sexual exploitation of children,” the agency explained. “The creation of business models in relation to this activity, where offenders pay to view [child pornography] material via livestreaming, means that there is a financial dimension to this activity in the form of payments and profits.”

“The emergence of the COVID-19 pandemic has caused an increasing demand for this commercialization because of the financial incentive it provides, especially to those who are in great need of money,” AMLC said. [ac]