THE Philippines' having been kept on a global dirty money watchlist has underlined ongoing government efforts to implement reforms and achieve an exit this year.
Finance Secretary Ralph Recto expects the country to be removed from heightened Financial Action Task Force monitoring, telling The Manila Times on Sunday that "President Ferdinand Marcos Jr. has instructed relevant government agencies to do what's necessary to comply with [the] FATF."
IMF Resident Representative Ragnar Gudmundsson, meanwhile, told The Times that "the efforts of getting out of the list have been acknowledged, and I think there's a strong commitment — there's been a request for an action plan to get out of the list — so we're hopeful that progress will be made."
Gudmundsson, who ahead of the FATF decision had urged the government to step up efforts during a Manila Times economic forum, also said, "I think there's an impetus to get out of the list by the end of the year."
Last Friday, the intergovernmental FATF announced that the country would remain on the "gray list" of states requiring heightened monitoring of their anti-money laundering and combating financing of terrorists (AML/CFT) systems.
"The Philippines has taken steps towards improving its AML/CFT (anti-money laundering and combating financing of terrorists) regime, including by identifying and investigating TF (terrorist financing) cases," the Paris-based FATF said in a gray list update.
This was not enough to prompt the watchdog to drop the country from the list due to five "strategic deficiencies:
– Demonstrating that effective risk-based supervision of designated non-financial businesses and professions (DNFBPs) is occurring
– Demonstrating that supervisors are using AML/CFT controls to mitigate risks associated with casino junkets
– Enhancing and streamlining the access of law enforcement agencies to beneficial ownership information and taking steps to ensure that the data is accurate and up-to-date
– Demonstrating an increase in money laundering investigations and prosecutions in line with risk
– Demonstrating an increase in the prosecution of terrorist financing cases.
"The FATF urges the Philippines to swiftly implement its action plan to address the above-mentioned strategic deficiencies as soon as possible as all deadlines expired in January 2023," the watchdog said.
The country — previously blacklisted from 2000 to 2004 — was returned by the FATF to the gray list following a review. Last month, with a reported one-year extension having expired, Marcos ordered all agencies concerned to work on achieving a gray list exit this year.
In a statement on Friday, the Anti-Money Laundering Council (AMLC) highlighted the gains noted by the FATF and said that the government remained committed to implementing the needed reforms.
"This improvement in our AML/CFT regime is a strong recognition of the government's efforts in curbing terrorism and terrorism financing incidents in the country," Anti-Money Laundering Council Secretariat Executive Director Matthew David said.
"It also sends a positive signal to the international community on the unwavering commitment and continuous progress made by the Philippines on this front," he added.
In an updated list of answers to frequently asked questions, the FATF said the country needed to enhance AML/CFT activities with regard to DFNBPs, casino junkets, beneficial ownership information, money laundering and terrorism financing prosecution, and cross-border declaration measures.
It reiterated Marcos' order that agencies complete all "deliverables" this year, which it said were contained in the National Anti-Money Laundering, Counter-Terrorism Financing, and Counter-Proliferation Financing Strategy 2023-2027 adopted in July last year.
"While the FATF does not call for the application of enhanced due diligence measures, its members and other jurisdictions may consider a country's graylisting in their risk analysis when dealing with the country and/or its nationals," the AMLC noted.
The FATF did not explicitly state a new deadline, but it said that countries in the gray list would have "committed to resolv[ing] swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring."
The next update could be issued by June based on previous FATF actions.
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