FATF wants tight monitoring of financial transactions

Anti-money laundering officials want to clamp down on non-profit organizations as well as so-called financial gatekeepers such as lawyers and accountants to comply with additional requirements of the Financial Action Task Force (FATF).

The Anti-Money Laundering Council (AMLC) said discussions are on-going on expanding the coverage of the requirement to report suspicious transactions.

After being removed from the FATF blacklist, the Philippines has been removed from the monitoring list of the task force since February this year. However, the task force has revised and expanded its original 40 recommendations which has been adapted by the Asia Pacific Group where the Philippines is a member.

The AMLC said that the regulatory net of the Anti Money Laundering Act (AMLA) should be expanded to include non-profit organizations that routinely receive donations, often from unquestioned sources.

Moreover, professionals who facilitate financial transactions such as lawyers, notary publics and even accountants should also be required to report suspicious transactions that could indicate laundering of dirty money.

AMLC executive director Vicente Aquino told reporters that the so-called revised 40 recommendations of the FATF included provisions for the monitoring and regulation of funds coursing through non-profit organizations.

According to Aquino, these organizations are not currently required to report their transactions to the AMLC but they could be covered by separate regulations to be issued by the Securities and Exchange Commission (SEC).

"This will not require an amendment to the law since non-profit organizations are already covered institutions under the AMLA and they are under the regulatory cover of the SEC," he said.

Aquino said the SEC could issue new guidelines for reporting anomalous transactions applicable to non-profit organizations which have long been suspected as possible channels for dirty funds.

However, Aquino said requiring certain professionals to report anomalous transactions would require an amendment to the AMLA since they are not covered by the law.

"The most we can do is to make representations to professional organizations to urge their members to report such transactions," Aquino said. "But of course it will be purely voluntary because the council does not have the mandate to make it a requirement."

Aquino said professionals such as lawyers and accountants could easily detect irregular transactions. "For example, if an accountant knows that his client is not wealthy and suddenly buys a large property or issues large cheques, that is reportable," he said.

But Aquino admitted that the AMLC could only recommend the application of the same parameters applicable to financial institutions such as the know-your-client protocol and transaction thresholds.