Global anti-money laundering watchdog Paris-based Financial Action Task Force (FATF) is again strongly encouraging the Philippine government to implement anti-money laundering/counter-terrorism financing (AML/CTF) measures to ensure it meets the deadline of a January 2024 delisting from its “grey list”.

As a grey-listed country, it means the Philippines is a jurisdiction under increased monitoring and is “actively working with the FATF to address strategic deficiencies” to counter “money laundering, terrorist financing, and proliferation financing.”

“The FATF urges the Philippines to swiftly implement its action plan to address (the) strategic deficiencies as soon as possible as all deadlines expired in January 2023,” FATF reiterated in an update released Saturday, Oct. 28 (Philippine time).

The latest FATF report included 23 countries still under increased monitoring. Besides the Philippines, the only other ASEAN country in the watchlist is Vietnam.

The Philippines was given a one year extension from January 2023 to January 2024 to work on complying with the required AML/CTF action plans.

FATF has again reminded the Philippines that in June 2021, when it was placed on the grey list, that it “made a high-level political commitment to work with the FATF and APG (Asia Pacific Group) to strengthen the effectiveness of its AML/CFT regime.”

“The Philippines should continue to work on implementing its action plan to address its strategic deficiencies,” said FATF.

In the update, it listed five areas of 18 action plan items that still needs to be addressed before the January 2024 deadline, the same five items that was in the June 2023 update. This was lower than the six items listed in both the February 2023 and October 2022 update.

Three of the five items are: the implementation of effective risk-based supervision of Designated Non-Financial Businesses and Professions; supervisors should be using AML/CFT controls to mitigate risks associated with casino junkets; and an enhanced and streamlined law enforcement agencies’ access to beneficial ownership information and taking steps to ensure that these information is accurate and up-to-date.

Other action plans that need to be taken cared of as soon as possible include: an increase in money laundering investigations and prosecutions in line with risk; and an increase in the identification, investigation and prosecution of terrorist financing cases.

According to the FATF, when it places a jurisdiction under increased monitoring, the country in the grey list would commit to “resolve swiftly” the identified strategic deficiencies within agreed timeframes.

Meanwhile, last Oct. 25, the country’s financial intelligence unit the Anti Money Laundering Council (AMLC), said it will heed Malacanang’s call to work harder to get out of the FATF grey list.

AMLC said this a week after Malacanang issued Memorandum Circular No. 37, which directed all AML/CTF-involved agencies in government to urgently implement the strategies to combat the proliferation of money laundering.

The AMLC will also lead the National Money Laundering/Terrorist Financing Risk Assessment (NRA) Working Group to “issue guidelines and coordinate with other government departments, agencies, and the private sector.”

The Philippines was grey-listed on June 25, 2021 because of unresolved AML/CTF problems and other technical compliance deficiencies. Before 2021, the last time the country was on the FATF watchlist was in 2013.

Last August, Bangko Sentral ng Pilipinas Governor Eli M. Remolona Jr., who is also the chairman of the AMLC, said that they “know what to do” to be taken out of the grey list.

He stressed that there are two important proposed legislations that they are supporting to help convince FATF to remove the Philippines from the grey list, and these are the bills Amending the Bank Secrecy Law and the Anti Financial Account Scamming Act (AFASA), among others.

Two years ago, in the October 2021 FATF update, there were eight areas in the 18 action plan items that the Philippines need to comply with. This is now just six that FATF is dissatisfied with as far as the Philippines’ progress report is concerned.

Based on the country’s third follow-up report (FUR) on its mutual evaluations report (MER), the FATF said the country has acted sufficiently to resolve some of the AML/CTF issues within the agreed timelines.

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.  

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 in August 2022 which was based on the government’s Feb. 1, 2022 reporting to FATF.

The FATF said the country has acted to fix some of the AML/CTF issues. “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 FATF also 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  on Money Laundering to monitor its progress and to “strengthen its implementation of AML/CTF measures.”

So far, the Philippines has resolved some of its AML/CTF problems and has made good progress in resolving technical compliance deficiencies.