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MANILA, Philippines – Contrary to fears raised in Congress earlier, the Philippines narrowly averted landing on the blacklist of the global Financial Action Task Force (FATF), which “responded positively to the initiatives of the Philippine government to enhance its transparency and accountability mechanisms in financial transactions,” the office of Palace Undersecretary Abigail Valte said Saturday, citing an Anti-Money Laundering Council (AMLC) report.
In a letter to President Aquino, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr., in his capacity as AMLC chairman, said the FATF recognized the reforms instituted by the Philippine government, by upgrading the Philippines from the “dark grey list” to its “grey list.” The country was previously under the “dark grey list,” which refers to jurisdictions not making sufficient progress, and is now in the “grey list,” which signifies it is making sufficient progress in addressing deficiencies in its Action Plan.
According to Tetangco’s report, the FATF took notice of the passage of key legislative reforms certified as urgent by the President. In particular, the bills recently signed into law – “An Act To Further Strengthen The Anti-Money Laundering Law” and “The Terrorism Financing Prevention And Suppression Act of 2012” – strengthened the capability of government to identify and prevent financial transactions related to illegal activities and those that undermine global security.
There has been warnings earlier that Manila would land on the FATF blacklist because Congress adjourned sine die June 6, passing only two of three key pieces of legislation amending the anti-money laundering regime in the country. The FATF was reportedly pushing for an “all or nothing” approach and some quarters feared that passing only two, not three, reforms before the FATF holds its annual meeting this week, would put the Philippines in trouble.
The third reform, expanding the provisions of the law on covered institutions and persons---to include jewelers, insurance agents, pawnshops, among others to be covered by the anti-money laundering law---was not passed by Congress for lack of time.
The two reforms that were passed, however, enabled the Philippines to avoid being classified and downgraded to the “black list,” which would have resulted in stricter inspections of financial transactions in the country, delayed remittances, and higher transaction fees.
“Transparency and accountability are among the foremost guiding principles of the Aquino administration. And while we recognize that more needs to be done to strengthen our existing anti-money laundering and anti-financial terrorism measures, we take the satisfaction expressed by the FATF as affirmation of the institutional reforms that we have constantly advocated,” said a Palace statement reacting to Tetangco’s report.
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