The Philippines is hopeful of being taken off the money laundering “grey list” of the Financial Action Task Force (FATF) of this year, the country’s Anti-Money Laundering Council said yesterday.
The FATF, an intergovernmental organization combating money laundering and terrorism financing, added the Philippines to the list in June 2021 for several reasons, including risk of money laundering from casino junkets and lack of prosecution for terrorism funding cases.
The Philippines has yet to address several issues flagged by the FATF, executive director of the Anti-Money Laundering Council, Matthew David, told a presidential palace press conference.
“The most challenging action item is terrorism financing prosecution. We need to file more terrorism financing cases,” he said.
The longer the Philippines is on the grey list, the higher chance it has of being downgraded to the black list, David said.
Being blacklisted by the FATF could result in more stringent requirements and higher transaction costs for millions of Filipinos living and working abroad who send billions of dollars to the Philippines in remittances
David said President Marcos Jr. ordered all concerned agencies to fast-track the country’s compliance with the requirements of FATF and eventually remove Philippines from the international group’s grey list within the month, the government’s self-imposed deadline after it missed the January 2023 deadline set by the FATF for the country to address 18 strategic deficiencies to exit the grey list.
David said there was no extension of the deadline but the Philippines has to address the eight remaining issues which include demonstrating that effective risk-based supervision of Designated Non-Financial Business and Professions (DNFBP) is occurring; demonstrating that supervisors are using Anti-money Laundering and Counter-Terrorism Financing (AML CTF) controls to mitigate risks associated with casino junkets; enhancing and streamlining law enforcement agency (LEA) access to beneficial ownership (BO) information and taking steps to ensure that BO information is accurate and up-to-date; demonstrating an increase in money laundering investigations and prosecutions in line with risk; and demonstrating an increase in the identification, investigation and prosecution of terrorist financing cases, among others.
The AMLC, the Philippine Amusement and Gaming Corp.the Anti-Terror Council, and the Bureau of Customs are among government agencies overseeing the compliance with the remaining strategic deficiencies.
David said aside from possible higher costs of sending money to the Philippines, being in the grey list has a negative impact on the Philippines’ credit rating and in the foreign direct investments (FDIs).
“There’s already a reputational risk on the Philippines, particularly on the economy. It may affect our credit rating, as you very well know, the World Bank and even the IMF (International Monetary Fund) is looking also at the status of the Philippines regarding the grey list. It may also affect foreign direct investments in the Philippines, because if you don’t exit the grey list, they may think that our AML CTF system is not adequate, or sufficient enough or strong enough as regards to money laundering and terrorism financing,” he said.
At present countries included in the FATF’s black list are Iran, North Korea and Myanmar.
David said with the current inclusion of the Philippines in the grey list, international bodies such as the World Bank (WB) and the IMF are already closely monitoring the country’s compliance and “if you don’t exit the gray list, they may think that our AML (Anti Money Laundering) law is not adequate enough or strong enough,” he said.
He said there had already been anti-money laundering and terrorist financing cases that have been filed but he declined to give details. (With Reuters)
