FMJ wants Ph out of FATF gray list
By Nidz Godino
"We've directed AMLC to accelerate action plans to combat money laundering and counterterrorist financing, and to file cases against violators," President Ferdinand Marcos Jr. said on Facebook country should exit from gray list of global anti-dirty money watchdog Financial Action Task Force (FATF) by October this year, FMJ ordered Anti-Money Laundering Council (AMLC) and concerned agencies to put measures in place to make this happen.
"We're committed to safeguarding our OFWs by making their transactions safer, reducing costs and easing regulatory burdens to support them," he stressed.
AMLC executive director Matthew David said the President issued order during meeting at Malacañang.
Order was also addressed to Bangko Sentral ng Pilipinas Governor Eli Remolona Jr.
"President has reiterated government's high-level political commitment and directed all government agencies concerned to swiftly address remaining strategic deficiencies identified by FATF in relation to gray listing of Philippines, since we already did not meet deadline of January 2024, we're still in gray list," David said at press conference.
He said January exit was self-imposed deadline of the government, failed to meet original January 2023 deadline.
"Our aim, aim of government, is to exit gray list by January 2024… self-imposed deadline, we are still hopeful we will exit gray list this year, 2024," David said.
Paris-based FATF re-included Philippines in gray list in June 2021 after country failed mutual evaluation by Asia Pacific Group on Money Laundering.
Body had identified 18 deficiencies in country's measures against money laundering and terrorist and proliferation financing. Of total number, eight are still outstanding.
Remaining eight action item plans Philippines has to address include effective risk-based supervision of non-financial businesses and professions like lawyers, accountants, real estate developers and brokers; controls to mitigate risks associated with casino junkets; enhancing and streamlining of access to beneficial ownership information and taking steps to ensure information is accurate and up to date; demonstrating increase in money laundering and terrorism financing investigations and prosecutions; application of cross-border measures to all main seaports and international airports in the country.
"Most challenging action item is regarding terrorism financing prosecution… we need to file more terrorism financing cases and ones in charge of complying with these action items are law enforcement agencies, including AMLC, we should increase our money laundering investigation as well as terror financing as well as prosecution… we should demonstrate cross border measures were applied in all seaports and airports, including false declaration of confiscation and action," David said.
Gray list contains countries or jurisdictions under increased monitoring and are required to actively work with FATF to address strategic deficiencies in their regimes to counter money laundering, terrorist financing and proliferation financing.
Jurisdiction under increased monitoring is required to swiftly resolve identified strategic deficiencies within agreed timeframes.
There are 23 countries in gray list, including Philippines.
" Philippines is aiming to address all these deficiencies within 2024 and to trigger exit process from this FATF gray listing," he added.
David emphasized longer Philippines remains on gray list, higher risk that it would enter FATF's black list.
Black list contains countries or jurisdictions with "serious strategic deficiencies to counter money laundering, terrorist financing and financing of proliferation."
"Of course, we don't want to be in blacklisted jurisdiction…and if we will be on blacklisted list, there are repercussions to that and one of repercussions is effect on our transactions of our OFWs ,overseas Filipino workers, our OFWs usually send remittances to their families here in the Philippines, if we will be blacklisted... FATF would impose countermeasures on the Philippines and international financial transactions of Filipinos abroad," AMLC chair said.
Such scenario, he said, could lead to higher costs, additional and stringent requirements and denial of transactions.
"We do not want that to happen, so all government agencies are aiming to address those deficiencies, eight remaining action item plans, and eventually exit gray list this year," he maintained.
Getting stuck in gray list, David pointed out, may also affect Philippines' credit rating and foreign direct investments.
"Basically there's already reputational risk on Philippines, particularly on economy… may affect our credit rating… as you very well know, World Bank and even IMF ,International Monetary Fund is also looking into status of Philippines regarding gray list," he said.
David said Philippines has already complied with technical compliance aspect, citing passage of Anti-Terrorism Act and amendments to Anti-Money Laundering Act.
Last October, Malacañang issued Memorandum Circular No. 37, requiring urgent implementation of government's National Anti-Money Laundering, Counter-Terrorism Financing and Counter-Proliferation Financing Strategy 2023-2027 and ordering concerned agencies to support efforts against money laundering and terrorism financing.
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