THE PHILIPPINES has to prove its revised anti-money laundering and terrorism financing measures boosted safeguards and ensure it does not go back to the “gray list” of the Financial Action Task Force (FATF), the head of the Anti-Money Laundering Council (AMLC) said.
“For technical compliance, the question is really on whether we have laws, rules, and regulations. For the AMLA (Anti-Money Laundering Act) amendments and the Anti-Terorrism Act, these laws address technical compliance,” AMLC Executive Director Mel Georgie B. Racela said in an online briefing on Thursday.
“In terms of effectiveness compliance, it’s another matter… We should indicate our effectiveness compliance in the post-observation period report,” Mr. Racela said, noting the FATF report is due for submission “at least first week of April.”
Republic Act (RA) No. 11521 which further strengthened the AMLA was signed by President Rodrigo R. Duterte on Jan. 29 with immediate effectivity, only two days before the Feb. 1 deadline given by the FATF to the country to address gaps in its anti-money laundering and counter-terrorism financing measures.
The law allowed the AMLC to enforce targeted financial sanctions such as asset freezing in relation to the proliferation of weapons of mass destruction and their financing. Its provisions also expanded covered persons to include real estate developers and brokers, as well as Philippine offshore gaming operators
On Jan. 31, the AMLC published the updated implementing rules and regulations of the amended law as well as Republic Act No. 11479 or the Anti-Terror Act of 2020.
“So anything we can add to demonstrate positive and tangible progress in implementing these laws (RA 11521 and RA 11479) before the submission may be included [in the post-observation period report],” Mr. Racela said.
The central bank last year also updated its gauge to determine “dirty money” and terrorism financing risk through the Money Laundering/Terrorism Financing Risk Assessment System. The system uses a four-point rating scale to gauge money laundering and terrorism risks, ranging from low to high.
Factors to be assessed include inherent risk, quality of risk management, self-assessment systems, and the net money laundering/ terrorism financing and proliferation risk in BSP-supervised financial institutions.
Under the new scheme, more supervisory resources will be allocated to BSP-supervised financial institutions found to have higher net risk exposures and those that pose heightened risk to the safety and soundness of the financial system. In this case, BSP Governor Benjamin E. Diokno said the system will contribute to the overall stability of the financial system.
The Philippines was removed from the FATF’s gray list of countries deemed to have lax measures against dirty money and terrorism financing in February 2005, five years after its inclusion in 2000. — Luz Wendy T. Noble