NextGen Day

Demonstrating the efficacy of measures, rather than just enacting legislation to combat money laundering and terrorist funding, is required for the Philippines to be removed from the Financing Action Task Force’s gray list (FATF).

Following the passage of the Anti-Terrorism Act of 2020, or Republic Act 11479, and Republic Act 11521, which further amends the Anti-Money Laundering Act of 2001, said BSP Governor Benjamin Diokno in a virtual briefing on Thursday that the country had been able to address the technical deficiencies cited by international money laundering authorities in the Third Mutual Evaluation by international money laundering authorities.

He, on the other hand, said that these steps are insufficient since “we must show efficacy.”

Because the Philippines would require time to implement its new AML/CTF (anti-money laundering/counter-terrorist financing) laws, regulations, and other relevant issuances in order to demonstrate their effectiveness, the country has been designated as a “jurisdiction under increased monitoring,” according to the official statement.

The latest placement of the Philippines on the gray list is not the first time the nation has been placed on the list since 2000, or even before the passage of the Anti-Money Laundering Act of 2001, which was passed in 2001. (AMLA).

The country was removed from the list only in 2003, after the Asia Pacific Group on Money Laundering (APG) Review Group determined that the country was effectively implementing anti-money laundering (AML) measures, and after the enactment of Republic Act 9194, which amended the Anti-Money Laundering Act.

However, it was put on the gray list once again in 2010, and it was further demoted to the “dark gray list” in 2012 for failing to fulfill the deadline for addressing counter-terrorism funding (CTF) regulations by the end of 2012.

Only with the passing of RA 10167 and the Terrorism Financing Prevention and Suppression Act of 2012 did the nation regain its status as a gray list member.

He said that the government must address the 18 International Co-operation Review Group (ICRG) action plan items within the timeframe specified by FATF in order to demonstrate its efficiency in implementing anti-money laundering and counter-terrorist financing laws and regulations.

“Let me be very clear: completing these 18 action items should be the primary priority of the whole nation. In order to combat money laundering and terrorist financing, a holistic strategy is required, as shown by the Philippines’ National Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Strategy for 2018 to 2022 (NACS).

Following the Philippines’ placement on the FATF gray list a few days ago, Diokno claims that there has been no impact on cross-border banking.

In light of the recent FATF announcement about the list of countries subject to enhanced surveillance, we have not noticed any changes in the cost of cross-border banking to far. As changes in this area unfold, the BSP will keep a close eye on them and work closely with the financial sector in order to offer any required advice or support to our supervised financial institutions,” the governor said.

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