Phl escapes FATF blacklist

MANILA, Philippines -The Philippines has escaped a possible blacklisting by the global body on anti-money laundering and terrorist financing despite getting embroiled in an $81-million cyber heist a year ago.

In an ongoing review of compliance with anti-money laundering and countering financing terrorism (AML/CFT), the Philippines was not included in the list of jurisdictions with strategic deficiencies but have developed action plans. The list was released by the Paris-based Financial Action Task Force (FATF) last Feb. 24.

Included in the list were Ethiopia, Afghanistan, Bosnia and Herzegovina, Iraq, Lao PDR, Syria, Uganda, Vanuatu and Yemen. The FATF will closely monitor the implementation of the action plans presented by the nine countries.

Since the Philippines was evaluated just over three years ago, there is no clear schedule yet on the next assessment by FATF.

FATF added a number of jurisdictions which have not yet been reviewed. The organization continues to identify additional jurisdictions that pose a risk to the international financial system.

The Philippines was included in the “dark gray list” or jurisdictions not making sufficient progress by the FATF in October 2010 after it failed to address the remaining deficiencies in implementing its action plan.

The Philippines was upgraded to the “gray list” in June 2012 due to the initiatives of the government to enhance its transparency and accountability mechanisms in financial transactions.

In June 2013, the Philippines was eventually removed from the list of jurisdictions subject to the FATF’s ongoing global AML/CFT compliance process.

The country has since avoided getting blacklisted by FATF after it passed Republic Act 10167 and 10168 that criminalized terrorist financing and added predicate crimes to the Anti-Money Laundering Act.

However, RA 10168 left out casinos as among those entities that are required to report to AMLC.

In June 2013, the FATF determined the Philippines had made significant progress in improving its AML/CFT and noted the country had established the legal and regulatory framework to meet its commitments in its FATF Action Plan.

The FATF, however, raised concerns regarding the absence of AML/CFT measures for the casino sector.

The Bangko Sentral ng Pilipinas (BSP) has been pushing to amend the Anti-Money Laundering Act (AMLA) to include casinos; money services business or money transfer companies; dealers of precious stones, jewels and metals; dealers of high-value items or goods; and real estate developers, brokers and sales agents in the list of monitored institutions.

The proposed amendments were made during the inquiry conducted by the Senate on the $81 million funds stolen by hackers from the account of the Bangladesh Bank at the Federal Reserve Bank of New York that entered the Philippines through Rizal Commercial Banking Corp. (RCBC).

The country’s Anti-Money Laundering Council (AMLC) has since filed appropriate charges before the Department of Justice against several individuals, including some officials of RCBC who allegedly played a role in the scandal.

The BSP has also imposed a record P1 billion fine against RCBC for various violations.

Furthermore, the $15 million abandoned funds by casino players surrendered by junket operator Kim Wong to the AMLC for safekeeping were returned to the Bangladesh government.

Lawyer Mel Georgie Racela, deputy director for special projects and reports of the BSP’s supervisory and examination sector, has also been named as officer-in-charge of the AMLC Secretariat replacing AMLC executive director Julia Bacay-Abad who tendered her resignation effective last Jan. 31.

Former president and now Pampanga Rep. Gloria Macapagal Arroyo wants to include in the proposed House Bill 731 or the proposed New Central Bank Act the removal of the authority of the BSP to supervise the operations of AMLC.

The AMLC is an independent body that monitors the financial system to guard against dirty money deals. BSP Governor Amando Tetangco, Jr. sits as chairman of the council together with Insurance Commissioner Dennis Funa as well as Securities and Exchange Commission chair Teresita Herbosa.