Philippines Launches Probe into Dollar Smuggling

Jojo Rinoza and Dennis Jay Santos
Manila and Davao, Philippines
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200303-PH-CH-dollar-620.JPG A worker counts U.S. currency inside a money exchange outlet in Metro Manila, Philippines, July 2, 2018.

The Philippines has launched an investigation into large-scale smuggling of U.S. dollars and cash in other foreign currencies into the country by suspected syndicates, including a Chinese one, Philippine finance officials said Tuesday.

In 2019 alone, an estimated U.S. $370 million were brought into the Philippines by two entities, the Department of Finance said, identifying the syndicates only as the “Chinese” and “Rodriguez” groups.

The Bureau of Customs was asked to coordinate with the Anti-Money Laundering Council (AMLC) to probe “attempts by suspected syndicates to bring in large sums of foreign currency into the country,” Finance Secretary Carlos Dominguez said in a statement.

He said the investigation was prompted by a report from Customs Commissioner Rey Leonardo Guerrero saying syndicates were using travelers to bring in the cash, with corrupt officials at Manila’s main international airport abetting the illicit activity.

In his report, Guerrero recommended the creation of an inter-agency body “to keep tabs on the inflow of foreign currency into the country via the country’s ports of entry, and to recommend measures to deter the use of these funds for illegal activities,” the finance department said.

Guerrero based his recommendation “on the global threat of terrorism, organized crime, money laundering and the possibility that such foreign currencies find their way to such unlawful activities,” the statement from finance department quoted the customs commissioner as saying.

An initial investigation showed that foreign currencies brought in by the Rodriguez Group amounted to about $200 million, while the Chinese group’s funds reached around $167 million, the department said.

The order to open an investigation came days after Sen. Richard Gordon, who heads the Philippine Senate’s powerful Blue Ribbon committee, called for a probe into allegations that the Chinese had been bringing in an “inordinate amount of money” into the country.

Last year, the Chinese Embassy in Manila reported that a “huge amount of Chinese funds” had been smuggled out of China by criminal syndicates.

“A conservative estimate shows that gambling-related funds flowing illegally out of China into the Philippines amounts to hundreds of millions of Chinese Yuan every year,” the embassy said in a statement on Aug. 8, 2019. “There are analysts who believe that part of the illegal gambling funds has flown into local real estate markets and other sectors in the Philippines.”

Philippine laws on under-declared foreign currencies are “not categorical, and sanctions provided are not deterrent enough,” unlike in other countries, and there was a need to strengthen them, the finance department said.

In the United States, attempts to under-declare or not declare currency is defined as “bulk cash smuggling” and punishable by laws there.

“Thus, it is not farfetched that the ease of bringing foreign currency in our territory can be taken advantage of by lawless elements such as terrorists,” Guerrero said.

The Chinese group, according to the finance department, worked with couriers who traveled almost three times a week and carried about two pieces of luggage each that contain the cash. They escaped detection because they were escorted by corrupt members of the police and military forces, as well as the security group at Ninoy Aquino International Airport, he said.


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