FATF: Philippines Should Continue Strengthening AML, CFT Regime

The global money laundering and terrorist financing watchdog, the Financial Action Task Force (FATF), released on Friday its latest report regarding jurisdictions that are under increased monitoring. This list is also referred to as the “grey list.” The watchdog explained that countries on the grey list are collaborating with the FATF to resolve deficiencies related to terrorist financing and counter money laundering.

Paris-based Financial Watchdog Releases an Update Report

In its most recent update, the FATF revealed that 23 countries remain on the list with strategic deficiencies. Malta and the Philippines are still on the grey list, while the FATF decided to exclude Zimbabwe from its increased monitoring list, according to the most recent update. Acknowledging the impact of the COVID-19 pandemic, the watchdog said that it has been flexible with the jurisdictions that are not facing immediate deadlines.

“The FATF welcomes the progress made by these countries in combating money laundering and terrorist financing, despite the challenges posed by COVID-19,”

reads a statement released by the Financial Action Task Force

It was back in June 2021 when the Philippines committed to strengthening its anti-money laundering (AML) and combating the financing of terrorism (CFT) rules. According to the FATF, since then, the country has taken relevant steps to improve both CFT and AML regulations. Such measures included “increasing the resources of its FIU and utilizing its TFS framework for TF, ahead of any relevant deadlines expiring,” according to the watchdog.

The Task Force Provides Additional Recommendations

Despite the progress made by the Philippines, the watchdog identified that the country should continue to improve its framework. The country’s action plan includes demonstrating effective risk-based supervision of designated non-financial businesses and professions.

“Since June 2021, when the Philippines made a high-level political commitment to work with the FATF and APG to strengthen the effectiveness of its AML/CFT regime, the Philippines has taken steps towards improving its AML/CFT regime, including by increasing the resources of its FIU and utilizing its TFS framework for TF, ahead of any relevant deadlines expiring,”

explains the Financial Action Task Force’s latest report

Additional measures include sanctions for unregistered or illegal Money or Value Transfer Services (MVTS) operators. The Philippines should also implement relevant registration requirements for such operators. What is more, the Task Force urges the country to mitigate risks related to casino junket operators. The recent report outlines that the Philippines should implement AML and CFT controls regarding junkets.

Among other measures, the FATF’s recommendations urge the Philippines to increase its intelligence efforts when investigating and prosecuting money laundering. The same recommendation applies when it comes to the identification and prosecution of terrorism financing.