PHL likely to avoid FATF ‘gray list’

By Charmaine A. Tadalan, Reporter

THE Philippines is likely to avoid being “gray-listed” by the Financial Action Task Force (FATF) as it is on track to meet the Feb. 1 deadline to implement a stricter law against money laundering.

The amendments to the Anti-Money Laundering Act (AMLA) will immediately take effect once it is published, a legislator said after the Senate and the House of Representatives ratified the measure on Wednesday.

“In the interest of expeditious implementation of this law, and in order to meet the deadline as imposed by the FATF/APG (FATF Asia Pacific Group), the Panel has adopted the present Act’s immediate effectivity upon the completion of its publication,” Senator Grace S. Poe-Llamanzares said during Wednesday’s session.

The Senate on Wednesday ratified the Bicameral Conference Committee report that reconciled House Bill No. 7904 and Senate Bill No. 1945.

The measure includes real estate brokers and developers as covered persons for single cash transactions worth at least P7.5 million, up from the P5 million proposed in both bills.

Meanwhile, the bicameral panel agreed to delete the Senate’s proposal to increase the reporting threshold of the Land Registration Authority to P5 million from P500,000.

Philippine offshore gaming operators (POGOs) and service providers will also be included provided they engage in transactions in excess of P500,000.

The panel also agreed to limit the tax crimes covered to only tax evasion with a threshold worth at least P25 million, higher than the P20 million proposed by the House and President Rodrigo R. Duterte.

Once enacted, the Anti-Money Laundering Council (AMLC) will be given additional but limited investigative powers, such as the power to apply before a competent court for a search and seizure warrant, and a subpoena.

“This is in adherence to the key recommendation of the FATF/APG while at the same time still maintaining the integrity of the Constitution and our laws,” Ms. Poe-Llamanzares said.

The bill will take effect immediately after its publication in the Official Gazette or in a newspaper of general circulation to allow the AMLC to implement the law before Feb. 1.

AMLC Executive Director Mel Georgie B. Racela said the council has already drafted the implementing rules and regulations (IRR) while the AMLA amendments were being finalized. 

“We have drafted the amendments to the IRR and will submit this to the AMLC for their approval by end of this week,” Mr. Racela said over phone message.  

“Once signed by President Duterte and published in the Official Gazette, we will also publish the IRR. In short, we are taking parallel moves already to beat the February 1, 2021 deadline.”

He noted the AMLC is closely monitoring the measure and has coordinated with the Office of Deputy Secretary for Legal Affairs to ensure it is sent to President Duterte and Executive Secretary Salvador C. Medialdea as soon as possible.

The FATF gave the Philippine government until Feb. 1 this year to enact and implement the changes to the AMLA to address gaps in countering money laundering and terrorist financing. The initial deadline was originally set in October 2020, but was extended due to the coronavirus pandemic.

“Bills pertaining to the amendment of the AMLA have always had a difficult time… because of two seemingly clashing ideals: the virtue of adopting provisions recommended by an international body… and the virtue of preserving our own set of laws and rules,” Ms. Poe-Llamanzares said.

“The present set of amendments show us that it is possible — as it has always been — to find a middle ground.”

The measure also gives AMLC the authority to preserve, manage or dispose of assets pursuant to a freeze order, preservation order or judgment of forfeiture. The AMLC may also implement targeted financial sanctions against the proliferation of weapons of mass destruction and its financing.

The amendment also introduced a new sentence in the “non-intervention of the BIR (Bureau of Internal Revenue)” that will allow AMLC to coordinate with BIR on investigations relating to tax evasion.

“This amended provision aptly provides for AMLC’s ability to pursue investigations in coordination with BIR, while also maintaining AMLC’s independence from BIR and vice versa,” Ms. Poe-Llamanzares said.

The bicameral panel also agreed to include a section on information security and confidentiality to prevent leakage and misuse of information; but deleted the provision that will establish an incentives and rewards system for the informant and the agency.