Phl moves to exit int'l money laundering grey list

The government regulators are bullish that the Philippines will soon exit the Financial Action Task Force (FATF) grey list following “substantial progress” made throughout the years. 

Securities and Exchange Commission (SEC) Chairperson Emilio B. Aquino said on Monday that the regulator “remains dedicated to sustaining the gains made in beneficial ownership transparency and compliance.” 

The Philippine government, represented by Executive Secretary Lucas P. Bersamin attended the 2024 FATF Plenary in Singapore last week, where the Philippines was cited for the notable increase in its money laundering (ML) investigations and prosecutions in line with risk.

Likewise, the country was also reported to strictly implement beneficial ownership transparency obligations to ensure law enforcement access to beneficial ownership data records.

These were on top of its implementation of risk-based supervision of Designated Non-Financial Businesses and Professions. 

“The recognition of these significant milestones by FATF underscores the SEC’s commitment to being a reliable partner in the global fight against money laundering and terrorism financing. It also demonstrates our full support for the government’s effort to get out of the FATF grey list,” Aquino said. 

In 2019 and 2020, the SEC mandated the inclusion of beneficial ownership in general information sheets (GIS) for domestic and foreign corporations. 

The information was made accessible to various law enforcement authorities, including the Philippine National Police, the Bureau of Internal Revenue, the Philippine Drug Enforcement Agency, and the National Bureau of Investigation.

Furthermore, in 2021, the SEC prohibited the issuance and sale of bearer shares and bearer share warrants through SEC Memorandum Circular No. 1, Series of 2021 to enhance transparency and prevent the misuse of corporations for illicit activities.

To facilitate ease of doing business, the SEC initiated an amnesty program in 2023.

The program encouraged compliance with reportorial requirements, with over 85,000 corporations participating. It enabled companies to rectify delinquencies and waive past penalties by fulfilling a single fee requirement.

Following the extended amnesty period until 2023, the SEC took stricter action against non-compliant entities. Over 117,000 corporations were suspended to ensure adherence to transparency requirements. 

As a result of the SEC's efforts, the compliance rate has significantly improved, increasing from around 30 percent to nearly 70 percent within two years.

Early this year, President Ferdinand R. Marcos, Jr. directed all government agencies to address the remaining action items and mandated a comprehensive, whole-of-government approach with a high-level commitment to improving the anti-money laundering regime.