Phl exits FATF laundering list

The Philippines has been removed from the “gray list” of the Financial Action Task Force (FATF), thus, avoiding tough procedures on money transfer during the peak holiday season, a high-level financial official told DAILY TRIBUNE yesterday.

FATF recently said the country has cleared 18 strategic deficiencies it identified but said the country may exit the dirty money watchlist by 2025.

The government source, however, said the country has been stricken off the list earlier than scheduled.

In a statement, the FATF said the Philippines has completed its action plan to address deficiencies that had kept the country on the watchlist since June 2021.

Countries and jurisdictions included in the FATF’s grey list are under “increased monitoring” and risks being imposed with restrictions on remittances by other countries.

The FATF said the Philippines has been able to address the eight remaining action plan items.

These include the demonstration of effective risk-based supervision of Designated Non-Financial Business and Professions (DNFBP); use of anti-money laundering and counter-terrorism financing (AML/CTF) controls to mitigate risks associated with casino junket.

The Securities and Exchange Commission (SEC), meanwhile, said it will continue to invest in its digitalization thrusts and optimize resources to ensure sustainable industry reforms that will help the country stay clear of the FATF close monitoring.

“The SEC will continue investing in digitalizing and optimizing resources to ensure that the reforms we have implemented will be sustainable,” SEC chairperson Emilio Aquino said on Monday.

“We will also remain unwavering in our dedication to transparency and compliance, as we build on our gains and work alongside local and international partners to further strengthen our anti-money laundering (AML) and counter-terrorism financing (CFT) reforms,” he added.

Aquino was reacting to the recent report that the Philippines has “substantially completed” an action plan of 18 steps, which has kept the country under increased monitoring since June 2021.

Failure to complete the action plan would risk the Philippines being blacklisted by FATF, resulting in restrictions on financial transactions and potential delays and costs for consumers.

FATF’s Asia/Pacific Joint Group will conduct an on-site visit early next year to confirm the implementation and sustainability of AML and CFT reforms.

Strong commitment vs laundering

“This significant milestone demonstrates the Philippines’ strong commitment to tackling money laundering and terrorism financing by adopting crucial reforms aligned with global standards and best practices,” Aquino noted.

FATF cited the Philippines’ reforms enhancing access to beneficial ownership information and ensuring BO accuracy, as well as measures involving non-profit organizations to prevent illicit financing while allowing legitimate NPO activities to continue.

The SEC’s initiatives include requiring beneficial ownership declarations on corporate General Information Sheets, accessible to law enforcement agencies such as the Philippine National Police and the Bureau of Internal Revenue.

To support its reforms, the SEC has invested in technology, creating tools such as the Electronic Filing and Submission Tool and the Electronic Simplified Processing of Application for Registration of Company.

Partnering with the United Nations Office on Drugs and Crime and Open Ownership, the SEC has trained law enforcement in utilizing beneficial ownership information for investigations.

The SEC also developed a risk-based framework to regulate vulnerable NPOs, conducting compliance audits and hosting seminars for over 113,000 stakeholders to promote good governance.

On targeted financial sanctions, the SEC sets standards for covered persons, achieving compliance improvements among designated non-financial businesses and professions. 

The SEC also engaged with regulatory bodies and NPOs to conduct audits, outreach, and workshops to enhance TFS implementation.