The Philippines has remained on the gray list of the Paris-based Financial Action Task Force’s (FATF), according to the Anti-Money Laundering Council (AMLC).
This means the country is still part of the list of 21 countries who are under increased monitoring of the FATF. These countries include Asian countries like Vietnam and African nations such as South Africa.
AMLC said, however, that the FATF cited the government’s commitment to address their concerns. The initial deadline given by FATF to the country was January 2023.
“While the FATF does not call for the application of enhanced due diligence measures, its members and other jurisdictions may consider a country’s grey listing in their risk analysis when dealing with the country and/or its
nationals,” AMLC said.
“In the case of the Philippines, while still in the grey list, FATF’s latest recognition of the country’s progress in accomplishing the recommended action plans sends a positive signal to the international community on the country’s commitment to enhance its AML/CFT regimes,” it explained. AML/CFT pertains to measures to combat Anti-Money Laundering and Terrorist Financing.
In a statement, FATF said it needs to continue to work on implementing its action plan to address its strategic deficiencies, including by demonstrating that effective risk-based supervision of Designated Non-Financial Businesses and Professions (DNFBPs) is occurring.
Other deliverables include demonstrating that supervisors are using AML/CFT controls to mitigate risks associated with casino junkets, and enhancing and streamlining Law Enforcement Agency (LEA) access to BO (beneficial ownership)information and taking steps to ensure that BO information is accurate and up-to-date.
The FATF said demonstrating an increase in money laundering investigations and prosecutions in line with risk and demonstrating an increase in the prosecution of task force cases.
AMLC said the President in January ordered relevant government agencies to expedite efforts in addressing deliverables set by FATF within the year.
“The FATF urges the Philippines to swiftly implement its action plan to address the above-mentioned strategic deficiencies as soon as possible as all deadlines expired in January 2023,” the FATF said in a statement.
AMLC said that as the country remained on its grey list, the FATF has considered accomplished action plan items related to terrorism financing identification and investigation.
The FATF gray list is a list of countries that are actively working with the FATF to improve their AML/CFT measures.
“This improvement in our AML/CFT regime is a strong recognition of the government’s efforts in curbing terrorism and terrorism financing incidents in the country,” said Anti-Money Laundering Council Secretariat Executive Director Matthew M. David.
“It also sends a positive signal to the international community on the unwavering commitment and continuous progress made by the Philippines in this front,” he added.
It was in June 2021 when the Philippines made a high-level political commitment to work with the FATF and APG to strengthen the effectiveness of its AML/CFT regime, the Philippines has taken steps towards improving its AML/CFT regime, including by identifying and investigating TF cases.
Earlier, the Bangko Sentral ng Pilipinas (BSP) said the deadly bombing in Marawi could make it difficult for the Philippines to exit the FATF gray list.
BSP Governor Eli M. Remolona Jr. recently told reporters that the bombing in Marawi, which killed four people and wounded 50 others, could make FATF “more demanding” given that the incident could indicate the presence of terrorism financing.
The FATF flagged the country for supposed inadequacies in the effectiveness of the targeted financial sanctions framework (TFS) for both terrorism financing and proliferation financing.
Landing on the FATF grey list does not automatically result in sanctions kicking in, but could cause prolonged procedures in some financial transactions which could affect not only Filipinos traveling abroad but also Overseas Filipino Workers (OFWs) and migrants.
This is something Philippine authorities are keen to avoid in order not to inconvenience, particularly the millions of migrant workers whose remittances shore up the economy.
The BSP earlier said the main challenge in exiting from the gray list is enforcement since the country has already passed the necessary legislation, except for the amendment of the Bank Secrecy Law.