Sustained reforms needed even after exit from ‘gray list’ — AMLC

By Luisa Maria Jacinta C. Jocson, Reporter

THE PHILIPPINES is expected to finally exit the Financial Action Task Force’s (FATF) “gray list” by February, the Anti-Money Laundering Council (AMLC) said, but continued reforms will be crucial to ensure the country stays out of the dirty money watchlist.

“It’s very seldom that the FATF doesn’t grant an exit from the gray list after the onsite (visit),” AMLC Executive Director Matthew M. David said at an SGV & Co. forum on Friday.

“We are very positive that we will be able to exit because we have already shown (progress). That’s why I always say that we have to sustain. We still have to sustain what we did before and continue doing that until the next mutual evaluation.”

At its October plenary, the FATF kept the Philippines in its list of jurisdictions under increased monitoring for “dirty money” risks. The country has been on the list for over three years or since June 2021.

However, the FATF said it initially determined that the Philippines has “substantially completed” the recommended action items to improve its anti-money laundering and counter financing of terrorism (AML/CFT) regime.

The dirty money watchdog is set to conduct an onsite assessment to verify the country’s progress and sustainability of AML/CFT reforms.

This visit will likely take place early next year, before the FATF’s next plenary meeting in February.

Mr. David said that the Philippines will find out by February if it will be able to exit the list.

“Yes, we’ll find out. The same process, they will issue a public statement that they will upload on the FATF website,” he told BusinessWorld on the sidelines of the event.

The AMLC is also in the process of submitting a consolidated progress report to the FATF this month. Mr. David said they are “optimistic” about the progress made so far.

“What we will show in the report is that indeed we have evidence to back up our claims that we have complied with the 18 recommended action plan items,” he added.

At its June update, the FATF said the country needed to address three remaining deficiencies of 18 recommended action items.

These include “demonstrating that supervisors are using AML/CFT controls to mitigate risks associated with casino junkets; applying cross-border measures to all main sea/airports including detection of false declarations of currency and confiscation action in line with risk; and demonstrating an increase in the prosecution of TF (terrorism financing) cases in line with risk,” according to the FATF.

Mr. David said that failure to address the remaining action plans would have put the Philippines at risk of being placed on the blacklist.

“The longer we are in the gray list, the bigger the possibility that we will enter the blacklist,” he added.

Even though the country is expected to soon exit the gray list, there is still work to be done in order to sustain the progress made so far, Mr. David said.

“We intend to continue that to prove sustainability, because sustainability is very important to FATF… We must show that all these recommended action plan items are being sustained. We are sustaining our measures, our accomplishments,” he said.

“You still continue filing cases and we intend to do that. We will be filing cases for money laundering and terrorism financing until December, until January and thereafter.”

Mr. David said the AMLC will also continue to enhance the country’s AML/CFT regime by amending regulations and issuing new policies related to law enforcement for money laundering and terrorism financing, among others.

The AMLC is also seeking to make certain amendments to the Anti-Money Laundering Act, he added.

In 2002, the FATF blacklisted the Philippines for having no legal anti-money laundering framework. It was removed from the blacklist a year later after the passage of the Anti-Money Laundering Act.