By Corina Oliquino

MANILA — The surge in criminal activities related to money-laundering, terrorist financing and other similar threats in 2020 could result in the Philippines’ re-inclusion to the grey list of the G7 Financial Action Task Force.

In a report by the ANC’s The World Tonight, countries on the list are usually subject to higher cross-border transaction costs which will impact OFW remittances.

Investors tend to avoid countries on the watchlist. The task force grey-listed the Philippines in 2000 “for failing to address money-laundering issues” and removed the country in 2005 after it amended its law.

Anti-Money Laundering Council (AMLC) Secretariat Executive Director and lawyer Mel Racela said they will do their best to keep the country’s re-inclusion on the list.

“With the passage of the AMLA amendment as well as the Anti-Terrorism Act, we are able to apply for a re-rating in regard to our technical compliance,” Racela said.

On November 2020, Bangko Sentral ng Pilipinas (BSP) Gov. Benjamin Diokno warned the Philippines’ reputation before the global watchdog could be strained if the Congress fails to pass a law updating the Anti-Money Laundering Act of 2001.

“In a recent evaluation of the Philippines, the FATF saw gaps in the country’s laws and regulations on anti-money laundering and counter-terrorism financing (AML-CTF),” Diokno said.

“If any of the proposed amendments are not passed and not implemented before February 2021, the Philippines will be included in the Financial Action Task Force (FATF) International Co-operation Review Group gray list,” he noted.

“This will publicly identify the Philippines as a jurisdiction with strategic deficiencies in its AML-CTF regime that presents a risk to the international financial system,” he added.

In a report by CNN Philippines, Senate Bill 1412 and House Bill 6174 both seek “to further tighten rules by imposing targeted financial sanctions on entities that evade anti-money laundering safeguards, such as swift asset freezing, and to explicitly ban the financing of the distribution of weapons of mass destruction. Real estate developers and brokers are also required to report buying and selling of property to the regulators.”

At a media forum on February 12, Diokno pointed to the digitalization triggered by the COVID-19 pandemic on surging financial crimes linked to terrorist financing.

“Data from the Anti-Money Laundering Council reveals 68 legal actions or cases filed in 2020, up from the 42 in 2019. These include bank inquiry, freeze orders, civil forfeiture and complaints filed in court,” Diokno said.

“Money laundering or terrorist financing perpetrators prefer to use cash, which leaves little or no trail at all because it accounts in remittance or wire transfer service. We also see emerging use of e-money accounts and digital channels to facilitate movement of proceeds of illegal activities,” he added.

Duterte tightens anti-money laundering rules to avoid the list

In a report by Reuters, President Rodrigo Duterte signed Republic Act No. 11521 on January 29 “to strengthen anti-money laundering and terrorist regulations” ahead of the February 1 deadline set by the FATF or the country risk returning to its grey list.

The agency extended its original deadline of October 20, 2020 to February 1, 2021 due to the COVID-19 pandemic.

“The new law expands the powers of the AMLC, allowing it to impose targeted financial sanctions against the proliferation of weapons of mass destruction and its financing. It also allows the council to apply for court summons, and search and seizure warrants,” the report said.

“Consistent with its foreign policy, the state shall extend cooperation in transnational investigations and prosecutions of persons involved in money laundering activities wherever committed,” the legislation said.

The law will also allow AMLC to “scrutinize transactions involving Philippine-based online casino operators, which employ thousands of mainland Chinese workers, and real-estate firms and brokers engaging in single cash transactions worth more than ₱7.5 million ($160,000).”

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