In a letter to Bangko Sentral ng Pilipinas (BSP) Governor Rafael Buenaventura, the FATF pointed out that while the passage of the law was an important first step, more legal changes have to be made for the Philippines to be removed from a blacklist of countries seen as not doing enough to fight money laundering.
The FATF, the financial watchdog of the Organization of Economic Development and Cooperation (OECD), said it would not impose threatened sanctions on the Philippine government, but warned the country would remain on list until a number of concerns were addressed.
Earlier, House leaders agreed on a proposed amendment to reduce the threshold from P4 million to P500,000, close to the minimum amount contained in the US version of the law.
However, Buenaventura said there may be no need for Congress to legislate amendments since the concerns raised by the FATF should be sufficiently addressed by the implementing rules and regulations (IRR) of the law.
Apart from the high threshold, the FATF had also questioned the limited powers of the Anti-Money Laundering Council (AMLC) to open deposits due to strict bank secrecy and complained that the law was not applicable to deposits and investments made before legislation was introduced.
"This seriously inhibits the investigating body’s powers and is therefore a serious deficiency," the FATF said.
The task force said the BSP also had limited powers to look into certain numbered accounts.
"It is our hope that your government could take the necessary action, including any legislative amendments as early as possible and provide a timeframe for other remedial action on concerns that cannot be addressed immediately," the FATF stated in the letter.
The FATF said it would review the country’s progress during the next plenary meeting in Paris. The head of the FATF review group also sought a meeting with Buenaventura at a regional anti-money laundering conference on June 4-7.
The BSP chief said the IRR would be finalized in time for a meeting between the FATF and the AMLC, which he chairs.
"By that time, the government should have a harmonized position wherein all concerns raised by the FATF can be addressed by the IRR. We then have to simply wait for their comments and proceed from there if there is really a need to amend the law," Buenaventura said.
In a related development, Sen. Teresa Aquino-Oreta denounced President Arroyo’s economic "dream team" for making it appear that the country was on its way to being stricken off the FATF blacklist "when they knew as early as Feb. 20 that mere passage of the law would not be enough."
Oreta said finance and monetary officials hid this from the public after they had earlier lobbied Congress into approving in haste the Anti-Money Laundering Law.
"According to reports, the FATF informed Governor Buenaventura on a Feb. 20 letter that the passage of a law would be enough to delist the Philippines," she said. "What will the dream team, captained by Finance Secretary Jose Isidro Camacho, do now that their charade has been exposed after the FATF rejected the government’s plea?" – Rocel Felix