The Philippines’ compliance with international standards against money laundering will be reviewed by a team of foreign experts starting next month to determine if recent changes to the law are enough to prevent the country from being classified as a “high risk jurisdiction.”
The Anti-Money Laundering Council said the country would be evaluated by the Asia Pacific Group (APG) on Money Laundering starting with the submission of a compliance report next month and culminating with an onsite visit in November 2018.
The APG is a 41-member multilateral agency created in 1997 to combat the traffic of dirty money and terrorist financing. The Philippines is a founding member of the group along with 13 other jurisdictions.
According to AMLC, a poor rating in the mutual evaluation will mean a low level of effectiveness of antilaundering and terrorist financing measures, and effectively render the country noncompliant with regulations of the Financial Action Task Force. This, in turn, will put the country back on the international watchdog’s list of “monitored jurisdictions.”
This may lead to additional scrutiny from regulators and financial institutions that, in turn, will discourage trade and investment and increase the cost of doing business, the agency said.
“The mutual evaluation is not about the AMLC or any government agency,” the agency’s executive director Mel Georgie Racela said. “It’s about the Philippines. Maintaining a suitable investment climate is intimately connected to preserving the integrity of the financial system, and the country’s respective agencies can contribute in a very tangible way in this regard.”
The first phase involves submission of the report of technical compliance, which is intended to check whether the existing laws, regulations, legal issuances, and enforceable means comply with the FATF standards. This report is due in May 2018.
The second phase includes turning in the report on the effectiveness of the country’s existing antimoney laundering and antiterrorist financing systems, due in July 2018. This will be validated during the onsite visit in November 2018 by an APG team of experts. The results of this seven-month process will then be deliberated upon and published in 2019.