Philippines still in global list of dirty money havens

As FATF deadline looms

MANILA, Philippines — Paris-based Financial Action Task Force (FATF) has retained the Philippines in the gray list or jurisdictions under increased monitoring as the deadline for addressing the gaps in the country’s regime to counter money laundering as well as terrorist and proliferation financing nears.

During the three-day plenary session, led by FATF president T. Raja Kumar in Singapore, the global dirty money watchdog said the Philippines has been retained in the gray list after missing the January 2023 deadline as the country has yet to address five out of the 18 deficiencies in anti-money laundering/combating the financing of terrorism (AML/CFT) controls.

This was an improvement from the eight deficiencies identified by FATF in June.

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

The gaps include a demonstration that effective risk-based supervision of designated non-financial business and professions (DNFBPs) is occurring and that supervisors are using AML/CFT controls to mitigate risks associated with casino junkets.

The watchdog also wants the Philippines to enhance and streamline the access of law enforcement agencies to beneficial information and take steps to ensure that such information is accurate and up-to-date,

Furthermore, the FATF also instructed the Philippines to demonstrate an increase in money laundering investigations and prosecutions in line with risk as well as an increase in the identification, investigation and prosecution of terrorism financing cases.

The FATF urged the Philippines to swiftly implement its action plan to address the above-mentioned strategic deficiencies as soon as possible as all deadlines have already expired in January 2023.

The Philippines was given until January next year to address all the deficiencies in its regime to counter money laundering as well as terrorist and proliferation financing.

In June 2021, the Philippines made a high-level political commitment to work with the FATF and Asia Pacific Group on Money Laundering (APG) to strengthen the effectiveness of the country’s AML/CFT regime after it was reincluded in the gray list.

Aside from the Philippines, there are 22 other countries in the gray list. Four countries including Albania, Cayman Islands, Jordan and Panama are no longer subject to increased monitoring by the FATF.

On the other hand, the black list or high-risk jurisdictions still includes North Korea and Iran, while Myanmar was placed under due diligence measures by FATF.

FATF has maintained the suspension of the membership of Russia.

In 2002, the FATF blacklisted the Philippine for having no legal anti-money laundering framework.

The passage of Republic Act 9160 or the Anti-Money Laundering Act of 2001 (AMLA) as well as its amendments through RA 9194 paved the way for the removal of the Philippines from the blacklist in 2003. Since then the Philippines was in and out of the gray list or jurisdictions under increased monitoring.

The International Monetary Fund (IMF) earlier urged the Philippines to step up efforts to be taken out of the gray list of the global dirty money watchdog.

Shanaka Jayanath Peiris, mission chief of the 2023 IMF Article IV consultation team, said the multilateral lender sees the need for the Philippines to ramp up initiatives to strengthen its AML/CFT framework.

“Efforts to be removed from the FATF gray list should be stepped up and would benefit from the publication of a credible timeline to address outstanding AML/CFT issues,” Peiris said.