Foreign firms and individuals need not avoid transactions nor adopt more stringent measures when dealing with Filipino companies and nationals despite the country having been re-listed to the Financial Action Task Force’s (FATF) so-called “gray list” of countries that fall short on efforts against dirty money.
In a statement issued through the Bureau of Customs, the Philippine government pointed out that the FATF itself stated that “enhanced due diligence” measures need not be applied to gray-listed countries.
But the FATF encourages its members and all countries to take into account the information presented in the assessment, when making their risk analysis.
“Despite the clear pronouncements of the FATF, [we have] been receiving reports that Philippine-related transactions have been subjected to more scrutiny, or worse, de-risking [not transacting at all],” the government said.
“Filipino businesses or nationals should not be considered a high risk based solely on the inclusion of the Philippines in the FATF’s list of ‘jurisdictions under increased monitoring,’” the government added.
On June, the France-based FATF put back the Philippines in its roster of “jurisdictions that under increased monitoring,” for their failure to meet standards for a country that effectively fights money laundering and terrorism.
In particular, the the FATF describes these shortcomings as “strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing (PF).”
The last item—PF—refers to the provision of funds or financial services that are used for making, buying, possessing, developing, trading, moving, stockpiling and use of nuclear, chemical or biological weapons.
In the FATF’s update report issued on October, the first since the June report, the Philippines remained in the gray list along with 22 other countries.
In the October report, the FATF acknowledged that the Philippines has taken steps toward improving its regime on AML/CFT (anti-money laundering/combating the financing of terrorism] by developing and implementing guidelines on delistings and the unfreezing of assets for targeted financial sanctions related to PF.
Among other steps that need to be taken, the FATF said that the Philippines should work to implement its action plan, by demonstrating that AML/CFT controls are being used to mitigate risks associated with casino junkets, as well as implementing the new registration requirements for money or value transfer services and applying sanctions to unregistered and illegal remittance operators.
Established in 1989 during a meeting of the G-7 Summit — a meeting of the leaders of the world’s most influential nations — the FATF now counts 39 members. They do not include the Philippines.
In 2000, the Philippines was included in the FATF’s blacklist or “list of non-cooperative countries and territories” in the fight against dirty money.
Following the passage of the Anti-Money Laundering Act of 2001 and an amendment in 2003, the Philippines was removed from the FATF blacklist in 2005.
The Philippines was included for the first time in the gray list in 2010. Among the reasons were the country’s need to “adequately criminali(ze) money laundering and terrorist financing, and to implement adequate procedures to identify and freeze terrorist assets and confiscate funds related to money laundering.
In 2013, the Philippines was removed from the gray list but remained on a “watchlist” until 2017, during which time the government addressed FATF concerns about the need to regulate the casino industry in relation to anti-money laundering and anti-terrorism efforts.