The Philippines will be delisted from the countries under increased monitoring, or the grey list, of the Financial Action Task Force (FATF) “upon successful completion of all action plans – hopefully on or before January 2023.”
Benjamin Diokno, Bangko Sentral ng PIlipinas Governor and Anti-Money Laundering Council (AMLC) chairman, said the Philippines reports its progress to the FATF three times a year – January, May and September. The first report will be out this September.
“The Philippines has adopted compliant laws and regulations. But it is not sufficient. The Philippines need time to implement them to demonstrate effectiveness of anti-money laundering and counter-terrorism financing measures,” Diokno said.
“In any case, there is no sanction for being a jurisdiction under increased monitoring,” he added.
FATF on June 25 placed the Philippines, once again, in the grey list.
A country coming into grey list, meanwhile, faces severe problems like lack of trade opportunities, a downgrade of ratings, and a shrinking economy. It also affects the potential borrowings from the International Monetary Fund other global bodies.
“The Philippines has been working relentlessly to address the deficiencies identified in the 2018 Mutual Evaluation even amidst the COVID-19 pandemic. We remain strongly committed to swiftly resolve the remaining strategic deficiencies within agreed timeframes,” Diokno said.
The AMLC chief said it should be also noted that the Philippines has largely addressed the action plans initially indicated in the 2018 Mutual Evaluation Report – from 70 down to 18.
AMLC is the Philippines’ Financial Intelligence Unit tasked “to protect the integrity and confidentiality of bank accounts and to ensure that the Philippines shall not be used as a money laundering site for the proceeds of any unlawful activity.”
“The National Anti-Money Laundering / Combating the Financing of Terrorism Committee or NACC is also addressing the remaining ICRG action plans,” Diokno said.
FATF is the global money laundering and terrorist financing watchdog. It monitors countries, now totalling 200, to ensure they implement the FATF Standards fully and effectively and holds countries to account that do not comply.
FATF said jurisdictions under increased monitoring are actively working with them to address strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing.
“When the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring,” FATF said.
In June 2021, FATF said the Philippines made a high-level political commitment to work with them to strengthen the effectiveness of its anti-money laundering and counter-terrorism financing policies.
“Since the completion of its mutual evaluation report in 2019, the Philippines has made progress on a number of its recommended actions to improve technical compliance and effectiveness, including by addressing technical deficiencies on targeted financial sanctions,” FATF said.
Among those include controls to mitigate risks associated with casino junkets; implementing the new registration requirements for money or value transfer services and applying sanctions to unregistered and illegal remittance operators; demonstrating an increase in the use of financial intelligence; and enhancing the effectiveness of the targeted financial sanctions framework.
There are now 22 countries on FATF’s grey list. Aside from the Philippines, Haiti, Malta and South Sudan have also entered the list on June 25.
The Philippines was in the black list, or countries considered non-cooperative in the global effort to combat money laundering and the financing of terrorism, in 2000 and exited five years later after the Anti-Money Laundering Act was enacted. In 2012, the country entered the grey list.
In a separate statement, AMLC said the Philippines underscores its firm and high-level political commitment toward the timely implementation of the action plans to sufficiently address all anti-money laundering and counter-terrorism financing.
The action plans include the amendment and passage of anti-money laundering and counter-terrorism financing laws; enhancement of the supervisory framework; reinforcement of money laundering and terrorism financing investigation and prosecution; and campaigns to increase public awareness.
“Given the recent identification of the Philippines as “Jurisdiction under Increased Monitoring” with serious deficiencies, the relevant government and law enforcement agencies’ sustained pledge to implement the 18 action plans within the prescribed timelines will be essential to the country’s removal from such list,” AMLC said.
It stressed that the “mere identification of the Philippines as having “Jurisdiction under Increased Monitoring” with serious AML/CTF deficiencies does not automatically mean imposition of countermeasures.”
“It is only when the country fails to meet the deadlines will the FATF call on countries to impose countermeasures against the Philippines. Hence, all government agencies involved should deliver expected outputs on the action plans pertaining to them,” AMLC said.
It noted that in terms of criminal activities, corruption; drug trafficking; investment fraud and swindling, and violations of the Electronic Commerce Act of 2000 and cybercrimes, pose the highest level of threat.
