Marcos: Get Phl off FATF grey list ASAP

President Ferdinand Marcos Jr. has ordered government agencies concerned to get the country off the so-called "grey list" of the Financial Action Task Force within the month, Anti-Money Laundering Council Executive Director Matthew David said on Tuesday.

"The President has reiterated the government's high-level political commitment and directed all government agencies concerned to swiftly address the remaining strategic deficiencies identified by the FATF in relation to the greylisting of the Philippines," David said.

The Bureau of Customs, Philippine Amusement and Gaming Corporation, Anti-Terrorism Council, and the AMLC are some of the government agencies that must work double-time to get the Philippines off the grey list.

"Since we did not meet the deadline of January 2023, we're still on the grey list, and our aim, the aim of the government, is to exit the grey list this January 2024. That was a self-imposed deadline, but we are still hopeful that we (can) exit the grey list this 2024," he said.

The FATF, an international group that helps countries fix problems in their financial systems, such as money laundering and terrorism funding, placed the country on its grey list in June 2021 after it "found that we have strategic deficiencies" in handling the entry and exit of money that is thought to be illegal, David said.

To get off the grey list, the Philippines must register more designated non-financial businesses and professions, like attorneys, accountants, jewelry stores, and casinos. It also needs to implement additional controls to lessen the risks associated with casino junkets.

David said the Philippines needs to fix the problems the FATF had pointed out. "The most challenging action item is prosecuting terrorism financing. We need to file more terrorism financing cases," he said.

While being on the FATF grey list doesn't mean countries are considered high risk for crimes, it puts them under increased scrutiny from the international community.

Countries on the grey list commit to addressing the deficiencies within agreed timeframes and are subject to closer monitoring by the FATF.

'Blacklist' worse

The FATF "blacklist," on the other hand, lists countries with significant deficiencies in their anti-money laundering laws that have not been addressed, posing a threat to the international financial system.

Blacklisted countries are not officially sanctioned, but FATF members are called upon to apply enhanced countermeasures against them, such as increased due diligence on financial transactions.

Both lists are updated three times a year by the FATF. Being on either list can have significant reputational and economic consequences for a country.

David explained that being on the FATF's "blacklist" could mean stricter rules and higher transaction costs for the millions of Filipinos who live and work abroad and send billions of dollars back to their home country.

"Being on the blacklist means FATF believes a country has serious weaknesses in its anti-money laundering and counterterrorism financing systems," he added.

For overseas Filipino workers who send billions of dollars in remittances back home, the greylisting could translate to higher transaction costs, increased documentation requirements, and even delays or rejection of their remittances.

"The financial burden on our OFWs is a major concern," David stressed. "They may have to pay higher fees, submit additional documents, and face longer processing times for their hard-earned money."

While the Philippines has avoided the blacklist for now, its continued presence on the "grey list" still carries significant risks.

"This is a reputational issue," David emphasized. "It can affect our credit rating and discourage foreign direct investment."

The World Bank and International Monetary Fund also closely monitor the situation, raising further concerns about the country's financial standing.