LEGISLATORS should expedite the passage of amendments to the Anti-Money Laundering Act of 2001 (AMLA) to ensure the Philippines avoids the “gray list” of jurisdictions deemed lax on dirty money, the Anti-Money Laundering Council (AMLC) said.
Noting the signing into law of the Anti-Terrorism Act of 2020 or Republic Act 11479 (RA 11479), “the same attention and commitment must be given to amendments to AMLA,” AMLC said in a statement on Wednesday evening.
“Failure to pass and to implement the amendments to the AMLA, as amended, before February 2021 will have similar effects, that is, the Philippines’ inclusion in the FATF (Financial Action Task Force) ICRG (International Co-operation Review Group) gray list,” it added.
Key revisions sought for AMLA are more subpoena power for the AMLC, and bringing tax evasion and terrorism financing charges withn the regulator’s purview.
Both chambers of Congress have yet to proceed beyond committee level on the AMLA amendments. RA 11479 was signed by President Rodrigo R. Duterte on July 3.
The Philippines is currently under a 12-month observation period that was extended to February 2021 from the initial deadline of the end of October. The period is intended to address the gaps in its anti-money laundering and counter-terrorism financing rules.
“It must be remembered that it is not enough to pass (RA 11479) because the Philippines is being assessed both on technical and effectiveness compliance,” the AMLC said.
“The country must also demonstrate effective implementation of (RA 11479) before the observation period ends in February 2021,” it added.
The AMLC said among the possible consequences of gray-listing include enhanced due diligence on transactions with the European Union. This could then translate to additional paperwork and costs charged to individuals and businesses.
Correspondent banking relationships could also be put under greater scrutiny, it added.
“Gray-listing would have an effect on international trade, remittances, and humanitarian financial flows that support economic growth and development,” the AMLC said. — Luz Wendy T. Noble