Sanctions loom if Philippines fails money laundering law review

MANILA, Philippines — The Philippines is at risk of being slapped with sanctions if it fails the coming review by the Financial Action Task Force (FATF) of the country’s compliance with international anti-money laundering standards, an official said yesterday.

Anti-Money Laundering Council (AMLC) executive director Mel Georgie Racela said officials from the Sydney-based Asia-Pacific Group on Money Laundering (APGML) will be in the country from Nov. 15 to 28 to conduct a “mutual evaluation.”

“If again we fail this mutual evaluation there will be limits as to the amount of our cross border transactions and there may be, the covered persons of FATF members may also impose restrictions as to the transactions that may proceed and charge additional fees, for example for remittance fees and the like,” Racela told the Senate finance sub-committee.

The sub-committee, chaired by Sen. Sonny Angara, was deliberating on the proposed P47.4-million budget for the AMLC for 2019.

The APGML is the regional body tasked by the FATF to monitor the anti-money laundering system of the Philippines and other countries in the region.

Racela, however, also said positive outcome of the mutual evaluation “could also reshape the country’s financial and economic landscape through the adoption of responsive and effective policies that are based on reliable data to combat money laundering.”

He also pushed for the passage of a pending bill in the Senate seeking to strengthen Republic Act 9160 or the Anti-Money Laundering Act (AMLA) that could help the country obtain a favorable review.

The AMLA has been amended five times since its enactment in 2001 to adjust to changing international standards.

When asked to elaborate on the possible sanctions, Racela told reporters the country could be blacklisted by the FATF if it fails to pass the review.

“If we’re on the blacklist, other countries could impose counter-measures, including tagging Filipinos as high-risk customers and if we’re high risk customers, we will be subjected to enhanced due diligence, and if there’s enhanced due diligence, there’ll be additional cost for remitting (money) and there’ll be additional requirements for transactions,” he said.