THE LOGO of the Financial Action Task Force (FATF) is seen at the OECD headquarters in Paris, France, Oct. 18, 2019. — REUTERS

THE BANGKO SENTRAL ng Pilipinas (BSP) is confident the Philippine government will be able to address the remaining strategic deficiencies identified by the Financial Action Task Force (FATF) within the next two to three months, an official said.

BSP Deputy Governor Chuchi G. Fonacier said the Philippines has already addressed four of the eight remaining action plans of the FATF, which are needed to exit the “gray list.”

“Hopefully maybe over the next two to three months, the remaining (action plans) would be addressed,” she said during an economic forum hosted by the German-Philippine Chamber of Commerce and Industry on July 20.

Ms. Fonacier told BusinessWorld on the sidelines of the event that the BSP is confident the Philippines will be able to exit the FATF’s gray list by January 2024.

“We’re also collaborating with the Anti-Money Laundering Council (AMLC) for them to be able to address the remaining deficiencies. As I said, four out of eight has been addressed already,” she said.

Since June 2021, the Philippines has been included in the global “dirty money” watchdog’s gray list of countries subjected to increased monitoring to prove its progress against money laundering (ML) and terrorist financing (TF).

To be removed from the list, the Philippines has committed to comply with 18 action plan items. Progress reports are submitted to the FATF in three reporting cycles in a year — January, May and September.

In its latest assessment in June, the FATF said the Philippines should continue to work on implementing action plans to address strategic deficiencies in its fight against money laundering.

This includes demonstration of effective risk-based supervision of Designated Non-Financial Business and Professions and ensuring that supervisors use anti-money laundering/counter-terrorism financing (AML/CTF) tools to mitigate risks. 

The country should also streamline the access of law enforcement agencies to information related to beneficial ownership as well as demonstrate an increase in ML and TF investigations.   

Meanwhile, the passage of the Anti-Financial Account Scamming Act and amendments to the Bank Secrecy Law would help the Philippines exit the gray list as well, Ms. Fonacier said.   

In May, the House of Representatives approved House Bill No. 7446, which seeks to ease bank deposit secrecy rules to give the BSP the power to investigate deposit accounts of bank officials and employees for fraud.

Lawmakers also passed on third reading House Bill No. 7393 or the Anti-Financial Account Scamming Act which prohibits the use of bank accounts and e-wallets for suspicious activities.

According to Ms. Fonacier, the BSP is also conducting thematic reviews with banks to aid the country in addressing the remaining deficiencies.

She also said that the central bank, including then-BSP Governor Felipe M. Medalla, had earlier met with Executive Secretary Lucas P. Bersamin to discuss the FATF’s action plans.   

“The executive secretary himself knows the urgency of addressing the deficiencies identified by the FATF. We’re optimistic we can address these,” she said.   

Last month, the AMLC earlier said it expects more lawyers to report any suspicious transactions or unlawful activities under relevant laws on anti-money laundering as the Supreme Court approved the Code of Professional Responsibility and Accountability in April.      

In May, the AMLC also told financial institutions to strengthen sanction screening systems amid underperformance in testing metrics over the last 12 months.

Sanction screening is used to identify individuals or entities that are subject to economic sanctions. It is a requirement for financial players and other regulated industries.      

All covered entities must screen all relevant parties against the Anti-Terrorism Council lists and United Nations Security Council resolutions. — Keisha B. Ta-asan