The Philippines has 12 months to resolve “dirty money” issues that landed it in the “grey list” of the global anti-money laundering watchdog, the Financial Action Task Force (FATF), according to Bangko Sentral ng Pilipinas (BSP) Governor Felipe M. Medalla.
Under the original schedule, the Philippines was to be delisted by January this year. However, the process takes time, especially if the problem is enforcement and implementation of laws and regulations against money laundering, terrorist financing and proliferation financing or ML/TF/PF. Thus, the extended timeframe, possibly by 2024.
When asked if the BSP and the government can get things done and finally removed from the FATF grey list by January 2024, Medalla said: “We can’t guarantee. But, we will try our best.”
The BSP has had several meetings with key government agencies such as the Department of Justice to help identify deficiencies in the fight against dirty money transactions within the extended time frame.
Medalla said they still have a year to improve and to be delisted from the watchlist. “Solution requires a whole of government approach,” he also said. The National Anti-Money Laundering/Combatting the Financing of Terrorism (AML/CFT) Coordinating Committee or the NACC was established in 2018 for a whole of government approach.
The Philippines was placed again in the grey-list on June 25, 2021. Before 2021, the last time the country was on the FATF watchlist was in 2013.
Medalla said that as far as legislation is concerned, they have addressed the technical deficiencies with the AML/CFT laws such as the Anti-Terrorism Act of 2020 and amendments to the Anti-Money Laundering Act of 2001.
There are no pending bills or legislative measures in the pipeline. Even the proposed changes to the bank deposits secrecy law has already been recognized by the FATF, especially since the Anti-Money Laundering Council (AMLC) is exempted from the restrictions of the said law. The AMLC, chaired by Medalla, also has an unimpeded access to bank account information due to the latest version of the AMLA.
The FATF has taken note of the Philippines' progress in adopting stronger measures against money laundering and terrorist financing. Being on the list means the Philippines is one of jurisdictions under closed monitoring by the FATF until these strategic flaws have been addressed.
Progress reports are submitted to the FATF in three reporting cycles in a given year, or in January, May and September. The last progress report was released last August 2022 which was based on the government’s February 1, 2022 reporting to FATF.
Based on the country’s third follow-up report (FUR) on its mutual evaluations report or MER, the FATF said the country has acted sufficiently to resolve some of the AML/CFT issues within the agreed timelines.
“Overall, the Philippines has made good progress in addressing the technical compliance deficiencies identified in its MER,” said FATF in the August 2022 FUR.
The Philippines’ latest MER is deemed “largely compliant” on two of 37 recommendations based on the 18 action plans necessary to delist the Philippines from the grey list.
The FATF said that after reviewing the latest MER, the Philippines will stay in the so-called “enhanced follow-up” level and will continue to report back to the organization’s Asia/Pacific Group (APG) on Money Laundering to monitor its progress and to “strengthen its implementation of AML/CFT measures.”
To be taken out of the grey list, the country has committed to comply with 18 action plan items by January 2023. The deadline has passed and the country is allowed an extension.
The country’s financial intelligence unit, the AMLC, said that as a grey-listed FATF, the Philippines “must improve its AML/CFT regime” and “removal from such list requires accomplishing the country’s action plan within the prescribed timeline.”
So far, the Philippines has resolved some of its AML/CFT problems and has made good progress in resolving technical compliance deficiencies.