By means of Luisa Maria Jacinta C. Jocson, Reporter
THE PHILIPPINES made progress in its bid to leave the Financial Action Task Force (FATF) “grey list” next year, as it has already done “substantially completed” is the subjectmost important action points.
“Yes, I think we have taken a very important step,” said Governor Eli M. Remolona, Jr. from Bangko Sentral ng Pilipinas (BSP) in a text message.
This comes after the FATF included the Philippines on its list of jurisdictions under enhanced surveillance due to “dirty money” risks during its October plenary meeting.
The Philippines has been on the gray list for over three years now or since June 2021.
However, the FATF said the country has addressed remaining shortcomings in the recommended action points to improve its anti-money laundering and anti-money laundering practices. Ffinancing of terrorism (AML/CFT) regime.
“We are very pleased to report and share with you that the Plenary this week examined the Philippines’ progress and believes that the Philippines has indeed substantially completed this action plan,” said FATF President Elisa de Anda Madrazo during a press conference. conference late on Friday.
The FATF will conduct an on-site visit to verify this progress. This visit is expected to take place sometime between now and February 2025.
“A site visit means that a group of experts will go into the country to verify the progress the country has made so that the FATF can decide whether or not to remove the country from the gray list. We expect an answer to this in February 2025,” she added.
The on-site assessment will also “verify that implementation of AML/CFT reforms has begun and is continuing, and that the necessary political commitment remains in place to support implementation in the future,” the FATF said on its website.
The Anti-Money Laundering Council (AMLC) said in a statement that the country is now “closer to exiting the anti-money laundering watchlists by 2025.”
This would pave the way for Filipinos, especially foreign workers, to “benefit from faster and cheaper remittances and other transactions,” it added.
“If the remaining points of the action plan were not addressed, the Philippines would be at risk of being blacklisted,” the AMLC said.
“FATF member states impose restrictions and additional controls, and possible denial of financial transactions with blacklisted countries. This results in failed transactions, delays and costs that can be passed on to consumers,” it added.
AMLC said that FATF’s Asia-PaciFic Joint Group will visit the country early next year to “verify the sustainability of the AML/CTF reforms.”
“This is the final step towards the country’s removal from the gray list,” it added.
The FATF said last week that the Philippines has implemented important reforms such as “demonstrating risk-based supervision of designated non-financial businesses and professions (DNFBPs); demonstrate that regulators are using AML/CFT controls to mitigate the risks associated with casino junkets; implementing the new registration requirements for Money of Value Transfer Services (MVTS) and applying sanctions to unregistered and illegal money transfer companies.”
In July, Malacañang issued an executive order requiring all government offices to adopt the National Strategy to Combat Money Laundering, the Financing of Terrorism and the Financing of Proliferation 2023-2027.
The FATF also noted that the country’s reforms are aimed at streamlining law enforcement agencies’ access to beneficial ownership information and addressing the increasing number of money laundering investigations and prosecutions.
Ms. Madrazo of the FATF said the Philippines is an “example of the positive impact this process can have in a country.”
“By billions of dollars Fentering the country annually and the sheer volume of cross-border transactions, the progress the Philippines makes will have a huge impact on the security of the international financial system,” she added.
Meanwhile, analysts said the country is on track to leave the gray list, but reforms still need to be implemented.
“There is a good possibility of delisting if there is a clear warning and information dissemination about the need to comply with ‘entities with potential’ violations of the FATF. There must be constant supervision of these entities,” said Antonio A. Ligon, professor of law and business at De La Salle University in Manila, said in a Viber message.
On the other hand, Chester B. Cabalza, founder and president of the International Security and Development Center, said the site visit is still a “reaffirmation that the country is still risky for black money that needs to be cleansed.”
“Transparency in our financial data and strong coordination across line government agencies are needed to address this discrepancy,” he said. “The Philippines must leave the gray list to become more productive and return to a healthy country Ffinancial environment in the region.”
Leonardo A. Lanzona, an economics professor at Ateneo de Manila University, said tackling poverty and corruption will be crucial to understanding the risks of black money.
“While the government is setting the institutional requirements to get off the gray list, the overriding condition that keeps the country on the list remains. This relates to poverty, which is not a direct requirement on the list, but may indirectly influence the factors required to be removed from the list,” he said in an email.
Mr Lanzona said poverty contributes to informality and causes “unregulated transactions and corrupt financial networks not permitted by the FATF.”