Philippines Remains on FATF Grey List Despite AML/CFT Progress

On Friday, the Financial Action Task Force (FATF), a global financial watchdog, confirmed that the Philippines remains on its “grey list” of jurisdictions under heightened scrutiny. Despite this, the FATF acknowledged significant strides made by the Philippines in enhancing its anti-money laundering and counter-terrorism financing (AML/CFT) framework.

Recent developments and updates:

Following the FATF’s sixth Plenary, held in Singapore under the Presidency of T. Raja Kumar, the organization announced changes to its list, removing Jamaica and Türkiye from the “grey list.” However, the Philippines is among the 21 jurisdictions that continue to be closely monitored.

The FATF noted that the Philippines has shown improvements, particularly in increasing investigations and prosecutions related to money laundering, in accordance with identified risks. The country has also strengthened enforcement of beneficial ownership transparency requirements and facilitated law enforcement access to relevant data records. Moreover, risk-based supervision of designated non-financial businesses and professions (DNFBPs) has been actively implemented.

According to Inside Asian Gaming, despite these advancements, the FATF outlined strategic deficiencies that require further attention from the Philippines:

– Ensuring AML/CFT controls effectively mitigate risks associated with casino junkets.

– Strengthening cross-border measures at major seas and airports to detect false currency declarations and implement confiscation actions based on risk assessments.

– Increasing prosecutions related to terrorism financing in alignment with identified risks.

Urgency in implementation:

The FATF stressed the importance of the Philippines swiftly executing its action plan to address these deficiencies, emphasizing that deadlines for these measures expired in January 2023.

In response to the FATF’s requirements, the Philippine government, led by President Ferdinand Marcos Jr., has committed to fulfilling all obligations to be removed from the grey list by the end of 2024. This commitment is underscored by a Memorandum Circular directing 44 government agencies, including the Philippine Amusement and Gaming Corporation (PAGCOR), to review and fulfill necessary requirements.

Alejandro Tengco, Chairman and CEO of PAGCOR, disclosed during G2E Asia that Atty. Wilma Eisma has been appointed to oversee efforts to expedite the removal of the Philippines from the FATF grey list. This initiative underscores the government’s proactive stance in addressing regulatory challenges.

As FATF reports, significant strides have been made since June 2021, when the Philippines pledged to enhance cooperation with the FATF and Asia/Pacific Group on Money Laundering (APG). The ongoing collaboration aims to strengthen the effectiveness of the Philippines’ AML/CFT regime, ensuring robust measures are in place to combat financial crimes effectively.

While the Philippines has made notable progress in enhancing its AML/CFT framework, the country remains under FATF scrutiny due to identified strategic deficiencies. With a firm commitment from its government and ongoing regulatory efforts, the Philippines is poised to achieve compliance and exit the grey list by addressing key areas outlined by the FATF.