PH addresses FATF concerns about money laundering

MANILA, Philippines — The Philippines has averted a return to the Paris-based watchdog Financial Action Task Force (FATF)’s “blacklist” but will remain on the group’s “grey list” as the deadline for the resolving the concerns has already passed in January. 2023.

Nevertheless, at its meeting in October, the FATF commended the country for identifying 18 areas of concern in its fight against black money and terrorist financing.

“The Philippines has already gone through this process and we are very pleased to report, and that I can share with you, that the Philippines has indeed substantially completed this action plan,” FATF President Elisa de Anda Madrazo said at a press conference on Friday evening (Manila time).

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Being on the gray list puts a country under heightened FATF surveillance until it can close the gaps in its defenses against the flow of illicit funds within an agreed time frame.

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If the Philippines had failed to address the remaining gaps by then, the country would have been at greater risk of joining North Korea and Iran on the “blacklist.” The Philippines was last blacklisted in 2002.

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FATF member states impose restrictions and additional controls on blacklisted countries. This could result in failed cross-border transactions, delays and higher fees for money transfers, an important lifeline for many Filipinos.

Before the Philippines can finally leave the gray list, the FATF should send a team to the country to verify the progress the country has reported and ensure that “the necessary political commitment remains in place,” De Anda said .

The FATF Plenary Assembly meets three times a year, usually in February, June and October.

If all goes well, the Philippines could leave the gray list in February next year, albeit slightly later than the January 2025 exit that Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. had hoped for.

The FATF explained the Philippines’ progress, saying the country has demonstrated the use of credible controls against money laundering and terrorist financing risks posed by casino junkets.

The country was also credited with improving law enforcement agencies’ access to beneficial ownership data that can be used against individuals who hide their illegal activities and dirty money behind complicated corporate structures.

The FATF also noted the ‘risk-based’ supervision of sensitive entities such as casinos, lawyers, accountants and real estate agents. It also praised the implementation of new registration requirements for money transfer companies and sanctions against unregistered entities.