Philippines still in dirty money gray list

FATF cites need to act on 8 issues

MANILA, Philippines — Paris-based Financial Action Task Force (FATF) has retained the Philippines in its “gray list,” stressing the need for the country to implement its action plan to address strategic deficiencies in countering money laundering, terrorist financing and proliferation financing.

The global dirty money watchdog has retained the Philippines in the list of jurisdictions under increased monitoring due to strategic deficiencies, which included 22 other countries, released during the recently concluded hybrid FATF plenary from Oct. 19 to 21.

The FATF said the Philippines has taken steps to improve its anti-money laundering/combating the financing of terrorism (AML/CFT) regime by developing and implementing guidance on delisting and the unfreezing of assets for targeted financial sanctions related to proliferation financing.

After being reincluded in the FATF’s gray list on June 25, the Philippines has made progress in its high-level political commitment to work with the FATF and Asia-Pacific Group on Money Laundering to strengthen the effectiveness of the country’s AML/CFT regime.

However, the FATF said the Philippines should work to implement its action plan by demonstrating effective risk-based supervision of designated non-financial businesses and professions, that supervisors are using AML/CFT controls to mitigate risks associated with casino junkets, as well as implementing the new registration requirements for money or value transfer services and applying sanctions on unregistered and illegal remittance operators.

The global dirty money watchdog said the Philippines should also enhance and streamline law enforcement agencies’ access to beneficial ownership information and take steps to ensure that  BO information is accurate and up-to-date.

The country also needs to demonstrate an increase in the use of financial intelligence and in money laundering investigation and prosecution in line with risk as well as an increase in the identification, investigation and prosecution of terrorism financing cases.

According to the FATF, the Philippines should also demonstrate that appropriate measures are taken with respect to the non-profit organization sector, including unregistered NPOs, without disrupting the activities of legitimate NPOs.

Likewise, the FATF stressed the need for the Philippines to further enhance the effectiveness of the targeted financial sanctions framework for both terrorism financing and proliferation financing.

Since the start of the pandemic, the FATF has provided some flexibility to jurisdictions not facing immediate deadlines to report progress on a voluntary basis.

Anti-Money Laundering Council chairman and Bangko Sentral ng Pilipinas Governor Benjamin Diokno is confident the Philippines will be removed from the gray list by January 2023 as the country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes.