The global dirty money watchdog noted the Philippines has developed and implemented guidance on delisting and the unfreezing of assets for targeted financial sanctions related to proliferation financing.
The Philippines may yet be removed from the ‘gray list’ of Paris-based Financial Action Task Force, the watchdog against money laundering and terrorism financing countries, by 2023.
This was the assurance of Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno as he explained that the January 2023 deadline “allows for some slack, knowing that we are facing national and local elections in May 2022 which could result in major changes in the bureaucracy. That is the rationale for the January 2023 deadline.”
The global dirty money watchdog noted the Philippines has developed and implemented guidance on delisting and the unfreezing of assets for targeted financial sanctions related to proliferation financing, reducing the action plan items to 17 from 18 that need to be addressed.
“There is progress… We’re down to 17 deficiencies. Getting off the list is an all-of- government undertaking. The responsibility for satisfying the deficiencies rests not only with AMLC (Anti Money Laundering Council) but also with other government institutions,” Diokno told BusinessWorld.
Jurisdictions that are under increased monitoring of the FATF like the Philippines are required to submit reports every January, May and September to show the progress done in implementing anti-money laundering (AML) and counter-terrorism financing (CTF) measures.
“We do not have a deliverable item for the January  reporting cycle because we already submitted our compliance in the September reporting cycle,” AMLC Executive Director Mel Georgie Racela said in a Viber message, as he explained they are now working on deliverable items for the May 2022 reporting cycle.
These items, he said, include increasing the employees of the AMLC’s Financial Intelligence Analysis Group and proving an improvement in the timeline of sharing intelligence information with law enforcement agencies.
More terrorist financing investigators will be needed, Racela added.
Foreign currency declarations
The government must also tighten measures to ensure that foreign currency declarations are followed in major sea and airports.
The country is looking to prove to the FATF that it has increased the number of foreign currency declarations, as well as confiscations when the Customs rules are violated, Racela said.
“We are exerting best efforts to submit compliance to these items by January 2022,” he said.
To accomplish these deliverables, he said the AMLC is working with the Bureau of Customs (BoC), the Philippine National Police (PNP), and the Armed Forces of the Philippines (AFP), among others.
No new laws necessary
Diokno said no legislation is needed for the Philippines to be able to exit from the FATF’s gray list.
“Remember, we have to demonstrate effective implementation of existing laws. None of the 17 remaining deficiencies require passing new laws. We just have to remain focused and work unceasingly to satisfy the remaining deficiencies. We are doing all these amid the ongoing pandemic,” he said.
Republic Act 11479 or the Anti-Terror Act of 2020 was signed into law in July 2020, while Republic Act 11521, which strengthened country’s Anti-Money Laundering Law was enacted on Jan. 29, 2021.
The FATF set a February 1 deadline for the Philippines to show tangible progress in measures against financial crimes related to money laundering. It included the Philippines in its gray list in June.
“Since June 2021, when the Philippines made a high-level political commitment to work with the FATF and Asia Pacific Group to strengthen the effectiveness of its anti-money laundering/counter-terrorism financing (AML/CTF) regime, the Philippines has taken steps towards improving its AML/CFT regime, by developing and implementing guidance on delistings and the unfreezing of assets for targeted financial sanctions related to proliferation financing,” the Paris-based global dirty money watchdog said in a statement on Friday.
The FATF said the Philippines will remain under jurisdictions with strategic deficiencies alongside Albania, Barbados, Burkina Faso, Cambodia, Cayman Islands, Haiti, Jamaica, Malta, Morocco, Myanmar, Nicaragua, Pakistan, Panama, Senegal, South Sudan, Syria, Uganda, Yemen, Zimbabwe. Jordan, Mali, and Turkey were also placed under increased monitoring. Meanwhile, Botswana and Mauritius were able to exit the gray list.
Based on its assessment, the FATF pointed out that the Philippines still needs to prove the effectivity of its risk-based supervision of designated non-financial businesses and professions; show supervisors are using AMLC/CTF controls to mitigate risks related to casino junkets; and implement new registration requirements for money or value transfer services as well as slapping sanctions for unregistered and illegal remittance operators.
The country also needs to strengthen and streamline the access and accuracy of beneficial ownership information that are used by law enforcement agencies; boost usage of financial intelligence and increase in money laundering investigations and prosecutions; and show heightened identification, investigation, and prosecution of cases related to terrorism financing.
Finally, the FATF will be assessing the country’s ability in taking appropriate measures related to non-profit organizations without disrupting their legitimate activities; and to enhance the effectiveness of the targeted financial sanctions framework for both terrorism financing and proliferation financing.
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