PH gets 1-year extension to get out of FATF’s grey list

Posted by DG, Date posted at January 31, 2023

Among the world-renowned and respected global authorities, the Paris-based Financial Action Task Force (FATF), has given the Philippines another year to improve the implementation of its Anti-Money Laundering law and address terrorist financing. This has Governor Felipe Medalla of Bangko Sentral ng Pilipinas (BSP) and the Chairman of the Anti-Money Laundering Council (AMLC) address this matter with a whole-of-government approach that will be made for the country to exit FATF’s grey list. 

Who is the FATF? 

As a backgrounder, The Financial Action Task Force (FATF) is the global money laundering and terrorist financing watchdog. The inter-governmental body sets international standards that aim to prevent these illegal activities and the harm they cause to society. As a policy-making body, the FATF works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas. They have more than 200 countries and jurisdictions committed to implementing them.

When the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolving swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring. This list is often externally referred to as the “grey list”.

Why were the Philippines in their grey list year of 2022? 

It was indeed unfortunate that the Philippines missed its first deadline — which was pegged for this month, January 2023. Medalla also added that the FATF committees or action groups have cited gains in legislation that aim to thwart money laundering and terrorist financing in the Philippines.

So far, the country was able to attain excellent ratings but has to work on the Bank Secrecy Law. Details on this matter were not revealed by Medalla and he kept mum on the topic. He then brought focus to FATF citing the low number of cases filed against anti-money laundering and terrorist financing violator and their eventual conviction. Further digressing, he said that the reason for the one-year extension for the government was to allot more time for reviewing the implementation of its money laundering and terrorist financing law.

Plan of action moving forward 

He also volunteered that also being the Chair of the Anti-Money Laundering Council (AMLC) he had dutifully carried out meetings and discussions in depth with the Department of Justice (DOF) Secretary Crispin Remulla regarding the law’s implementation.

“They said that if we’re only more diligent in having a system that truly brings out all the real prosecution and conviction, the numbers will be much higher,” he said.

As the Governor of BSP, he also brought about that among the solutions to this issue include getting proof that the source of funds that rebels use came from terrorist financing. Following up on this, he presented another example the bets submitted for electronic cock fighting or the electronic sabong (e-sabong), which is gambling.

To this, he said, “The solution requires a whole-of-government approach, not just AMLC, not just DOJ but the law enforcement as well.” 

Moving forward, he gave positive feedback and remains strongly optimistic on the results of the meetings with the DOJ. “I’m quite confident, given in the early meetings, the focus will be there to try our best to typically increase the chances that by early next year, those problems have been met,” he said.

FATF has spotted that the Philippines met the criteria to be placed under its grey list in 2021 — after there were deficiencies seen in the implementation of the law that will prevent money laundering and terrorist financing activities. The first incident of the country being on FATF’s grey list was before the enactment of the Anti-Money Laundering Act of 2001, and again in 2010 for failure to meet the deadline to have counter-terrorism financing laws. 

This is still a piece of good news for the Philippines. At the very least, there is enough time to meet the deadliest deadline and great resolve on Medalla’s end to meet this, too. It’s reassuring that there is a global entity that looks out and makes sure that the right thing is done. Any feedback on this, folks? Is having the likes of FATF too much of an intervention? Let us know your thoughts by adding your comments below. Hope to hear from you soon! Thanks!

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