Philippines evades FATF blacklist, gets upgrade

MANILA -- The Philippines avoided a blacklist status from the Financial Action Task Force (FATF) and instead got an upgrade for taking significant steps to improve its laws against money laundering and terrorist financing, Malacañang said on Saturday.

In his letter to President Benigno S. Aquino III, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr., in his capacity as chairman of the Anti-Money Laundering Council (AMLC), said the Europe-based FATF had recognized the reforms instituted by the Philippine government by upgrading the Philippines from the “dark grey list” to its “grey list.”

The FATF is the international organization that sets the standards and monitors implementation of measures for fighting money laundering, terrorist financing and other threats to the integrity of the global financial system.

According to Tetangco’s report, the FATF took notice of the passage of key legislative reforms certified as urgent by the President.

In particular, the bills recently signed into law – “An Act To Further Strengthen The Anti-Money Laundering Law” and “The Terrorism Financing Prevention And Suppression Act of 2012” – strengthened the capability of government to identify and prevent financial transactions related to illegal activities and those that undermine global security.

Deputy presidential spokesperson Abigail Valte, in an interview over dzRB Radyo ng Bayan, said "the country was previously under the 'dark grey list,' which refers to jurisdictions not making sufficient progress, and is now in the 'grey list,' which signifies that we are making sufficient progress in addressing deficiencies in our Action Plan," she said.

Valte said the two recently passed laws strengthened the capability of government to identify and prevent financial transactions related to illegal activities and those that undermine global security.

"These reforms enabled the Philippines from being classified and downgraded to the 'blacklist,' which would have resulted in stricter inspections of financial transactions in the country, delayed remittances, and higher transaction fees," she said.

Valte said transparency and accountability are among the foremost guiding principles of the Aquino administration.

"And while we recognize that more needs to be done to strengthen our existing anti-money laundering and anti-financial terrorism measures, we take the satisfaction expressed by the FATF as affirmation on the institutional reforms that we have constantly advocated,” she added.

She acknowledged that another bill needs to be passed in order to be fully compliant with the FATF's requirements.

Valte said Congress has committed to immediately act on the bill when the session resumes in July.

In its report, the FATF said certain strategic deficiencies remain in the country's anti-money laundering and anti-financial terrorism measures.

In this connection, it advised the Philippines to enact the pending legislative amendments to the anti-money laundering law that, among others, extend the coverage of reporting entities, provide a broader definition of money laundering and increase the number of predicate crimes to include bribery, malversation of public funds, human trafficking, tax evasion and environmental crimes.

Meanwhile, in a statement, the AMLC said that avoiding the FATF blacklist is a positive news particularly for the overseas workers and the local economy.

It said that the financial transactions of countries on the FATF blacklist subject to additional reporting requirements and more stringent inspections that delay remittances and raise service fees. In some cases, financial institutions stop transactions with countries in the FATF blacklist.

The FATF Action Task Force was established by the G-7 Summit that was held in Paris in 1989 in response to mounting concerns over money laundering. This inter-governmental body sets the standards and promotes effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. (SDR/PNA/Sunnex)