Philippines making progress in fight vs dirty money
Based on the first follow-up report on the mutual evaluation of the Philippines obtained by The STAR, the Asia Pacific Group on Money Laundering (APG) said the country has made progress through the passage of new legislative instruments.
STAR/File
Philippines making progress in fight vs dirty money
Lawrence Agcaoili (The Philippine Star) - September 18, 2020 - 12:00am

MANILA, Philippines — The Philippines is making progress in addressing technical compliance deficiencies in its program against money laundering and terrorist financing, ahead of the deadline set by Paris-based global watchdog Financial Action Task Force (FATF).

Based on the first follow-up report on the mutual evaluation of the Philippines obtained by The STAR, the Asia Pacific Group on Money Laundering (APG) said the country has made progress through the passage of new legislative instruments.

The APG said the Philippines has addressed three key deficiencies including the lack of enforceable obligations to report attempted transactions, promptness in reporting suspicious transaction reports (STRs), and the absence of a requirement to report STRs related to tax offenses.

The Anti-Money Laundering Council (AMLC) has issued Regulatory Issuance 1-2020 amending Rule 22 of the implementing rules and regulations defining suspicious transaction reports or STRs as all transactions, whether completed or attempted, as well as to mandate the filing of STRs promptly within the next working day upon establishment or determination of suspicion.

“The Philippines’ effort in amending Rule 22 or the IRR is commendable. The issuance of the ARI No. 1-2020 addressed the deficiency of lack of enforceable obligations to report attempted transactions. In addition, Section 9(c) of the Anti-Money Laundering Act permits the AMLC to prescribe a different reporting period from the originally prescribed five working days,” the APG said.

Since  ARI  1-2020 has the force of law, APG said there is no need to amend the AMLA for the new reporting period to be in effect.

However, it noted that the Philippines is progressing in the proposed amendments to the AMLA to designate tax crimes as predicate offences to money laundering, subjecting them to the STR reporting requirement.

“The scope gap in relation to reporting STRs related to tax offenses has not yet been addressed,” the APG said.

As a result, the country’s technical compliance with the Recommendation 20 of the FATF was revised to largely compliant from partially compliant.

The AMLC also issued AMLC Resolution 246 in December last year, calling for the dissemination of analysis of suspected money laundering or terrorism financing or associated unlawful activities to address the lack of an explicit mandate for the agency to disseminate money laundering-related financial analysis to other relevant authorities.

It also deleted a provision contained in AMLC Resolution 40 issued in 2018 that limits the sharing of politically exposed persons (PEPs) information and analysis, not only in relation to money laundering to address the concern of the FATF under Recommendation 29.

As such, the country’s compliance to Recommendation 29 was re-rated to be compliant from partially compliant.

On the other hand, the technical compliance of the Philippine in Recommendation 15 was downgraded to partially compliant from compliant due primarily to the insufficient coverage of virtual asset service providers (VASPs) in the anti-money laundering and combating of financing of terrorism framework.

Earlier, AMLC Secretariat executive director Mel Georgie Racela said the country still needs to pass and implement further amendments to the AMLC to avoid inclusion in the FATF-International Cooperation Review Group gray list.

Proposed amendments to the law include the inclusion of tax crimes as predicate crimes to money laundering as well as the inclusion of real estate developers and brokers who engage in buying and selling of real properties.

The changes also aim to further strengthen the AMLC by granting it subpoena and contempt powers.

The STAR earlier reported the country’s observation period has been extended to February next year due to the COVID-19 pandemic. The FATF will decide in June 2021 whether or not the Philippines will be included in the watchdog’s gray list.

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