MANILA, Philippines — The Philippines has until April to effectively implement amendments to the anti-money laundering and terrorism laws to avoid being included in the list of countries with significant strategic deficiencies to counter money laundering and terrorist financing of Paris-based Financial Action Task Force (FATF).
In a virtual briefing, Mel Georgie Racela, executive director of the Anti-Money Laundering Council (AMLC) secretariat, told reporters the country has more than two months to strictly implement Republic Act 11479 or the Anti-Terrorism Act of 2000 signed in July last year and RA 11521, which was enacted in January.
“So anything we can add to demonstrate positive and tangible progress in implementing these laws before the deadline of the submission of the report may be included,” Racela said.
Racela said the successful implementation of the two laws would be included in the post-observation period report due for submission to the FATF – International Cooperation Review Group (ICRG) in the first week of April.
Racela said the Philippines would seek the “re-rating” of its technical compliance to global anti-money laundering and terrorism financing standards with the passage of the required amendments.
The Philippines is again in danger of being included in the gray list of the FATF which contains countries that failed to establish norms and standards to fight money laundering, terrorist financing and other related threats to the security and integrity of the global financial system.
The country narrowly avoided being placed on the blacklist in 2012 as it criminalized terrorist financing and pursued quicker freezing of suspect accounts.
The FATF blacklisted the Philippines in 2000 for failing to address “dirty” money issues, paving the way for the enactment of RA 9160 or AMLA in 2001. The country was subsequently removed from the blacklist in February 2005.
“The amendments of the AMLA gave the AMLC and the country a fighting chance,” Racela said.
After the country’s mutual evaluation review, the Asia Pacific Group (APG) on Money Laundering placed the Philippines under a 12-month observation period in October 2019, giving the country time to address deficiencies otherwise it would be included in the “gray list” of FATF.
Due to the pandemic, the observation period was extended up to February 2021 instead of October 2020 and the submission of the comprehensive report was moved to April.
Inclusion in the list would result to a two to four percent drop in remittances from overseas Filipino workers (OFWs), an additional layer of scrutiny from regulators and financial institutions, an increased cost of doing business, delayed processing of transactions and would block the country’s road to an “A” credit rating.
For his part, AMLC chairman and Bangko Sentral ng Pilipinas Governor Benjamin Diokno said in a virtual press briefing the Money Laundering Terrorist/Financing Risk Assessment System (MRAS) is expected to strengthen the country’s defenses against dirty money.