‘FATF gray list exit to boost economy’

Improved reputation, investor confidence

MANILA, Philippines — The removal of the Philippines from the gray list of  global dirty money watchdog Financial Action Task Force (FATF) is expected to have significant benefits and economic implications for the country, the Anti-Money Laundering Council (AMLC) said.

In an email interview, the AMLC told The STAR that exiting the global dirty money gray list would improve the reputation of the Philippine economy.

This would then increase “the reputation and investor confidence of the Philippines, which positively affect the potential influx of foreign investments,” the AMLC said.

It said that exiting the gray list could also improve the business relationships or financial transactions of Philippine businesses and persons with their foreign counterparts.

It could also alleviate the administrative burden imposed on the private sector and government agencies working on anti-money laundering and counter-terrorism financing (AML/CTF) measures due to the period of reporting to the FATF.

Countries included in the FATF’s gray list are required to report to the organization three times a year until they exit the list, the AMLC said.

“The potential benefits for our country’s exiting the FATF gray list also include the possible lowering of the risk rating for Philippine-related transactions, which may diminish delays and denials of transactions of Filipinos abroad, all stemming from being gray-listed,” it said.

The AMLC said the Philippines could also be delisted from the European Union’s list on AML/CTF. This will lift the requirement of all EU member-states to apply enhanced customer due diligence measures on business relationships or transactions involving listed countries.

The Philippines may also be excluded from “the United Kingdom (UK)’s advisory, wherein regulated businesses are required to apply enhanced customer due diligence measures and ongoing monitoring in any business relationships with a high-risk third country.”

The Paris-based FATF, an intergovernmental body established to combat money laundering and terrorism financing, had placed the Philippines on its gray list in June 2021 due to concerns over deficiencies in its AML/CTF regimes.

In its June update, the FATF retained the Philippines on the gray list for the third straight year as the country has yet to adequately address the gaps in its regime to counter money laundering as well as terrorist and proliferation financing.

After concerted efforts by the Philippine government and the private sector, the country has addressed 15 of the 18 action items needed.

The AMLC earlier told The STAR it is confident that the Philippines would be able to complete all three remaining action items from the FATF this year, triggering the country’s exit from the list.

The three remaining action items include mitigating risks associated with casino junkets, filing criminal charges against persons involved in terrorism financing, and further improving the country’s cross-border measures.

“There is a continuous high-level political commitment of the Philippine government to sustain the regulatory reforms in compliance with FATF standards after exiting the gray list,” the AMLC said.

This commitment is expressed through the National AML and CFT Strategy for 2024 to 2027, which sets out all government agencies’ strategic objectives and action plans for strengthening the country’s AML/CFT system.

This also includes addressing the FATF’s International Co-operation Review Group action plans, the AMLC added.