IMF wants aggressive action against “dirty money”
Philippines’ MANILA The Financial Action Task Force (FATF), a global organization that monitors the use of dirty money, has encouraged the Philippines to step up efforts to be removed from the gray list.
The 2023 IMF Article IV consultation team’s mission leader, Shanaka Jayanath Peiris, stated that the international lender believes the Philippines has to step up efforts to strengthen its anti-money laundering/combating the financing of terrorism (AML/CFT) framework.
“Efforts to be removed from the FATF gray list should be stepped up and would benefit from the publication of a credible timeline to address outstanding AML/CFT issues,” Peiris stated.
After failing to rectify 18 flaws in AML/CFT controls, the Philippines was once again added to the gray list in June 2021, according to a mutual evaluation report by the Asia-Pacific Group on Money Laundering (APG).
The Philippines has been on the list of jurisdictions that are subject to greater surveillance for two years, but was kept on it in June because it hasn’t addressed eight of the 18 issues.
The Philippines was kept on the gray list after missing the deadline of January 2023 to correct all shortcomings, according to T. Raja Kumar, the former FATF president, who was in office at the time.
“The Philippines was placed on the gray list in June 2021, but its action plan actually ran out in January of this year, and eight of the country’s original 18 action items are still unfinished. Therefore, this is not a small quantity, added Kumar.
The Philippines still needs to demonstrate the adoption of AML/CFT controls to reduce the risks associated with casino junkets and to increase money laundering and terrorism financing investigations and prosecutions, despite the fact that there has been tremendous progress over the past two years.
Other shortcomings include the failure to provide evidence that designated non-financial business and professions (DNFBPs) are subject to effective risk-based supervision, the need to improve and streamline law enforcement agencies’ access to beneficial ownership information and take steps to ensure that such information is accurate and up-to-date, and the failure to demonstrate an increase in the detection, investigation, and prosecution of terrorist financing.
In the meantime, the Anti-Money Laundering Council (AMLC) reminded covered parties, including banks, to put in place risk-based preventative measures against money laundering and terrorism funding on their clients, including the players.
The financial intelligence unit added in the advice that “the AMLC reminds all covered persons of their duty to implement risk-based customer due diligence (CDD), record-keeping, and transaction reporting measures on its customers, particularly the transactors.”
As stated in the implementing rules and regulations of Republic Act 9160, or the Anti-Money Laundering Act of 2001, the AMLC claims that transactors are customers.
It was noted that the term “transactor” is understood to mean any person who conducts business with a covered person but who is not the account owner or holder.
Whether an account is opened or money is actually moved, doing business refers to any actions related to the usual business, service, or product that a covered person provides or performs.
The AMLC also advised those who were covered to do risk analyses before introducing or utilizing such methods, technologies, and goods.
“This criterion includes using non-face-to-face methods for fund transfers and other transactions, such as cash deposit machines. According to the statement, “Covered Persons shall take reasonable steps to manage and mitigate the risks associated with the introduction or use of such items, methods, and technology.
The introduction of new technology shall not serve as a justification for covered people to forego taking the necessary preventative measures against money laundering and financing terrorism, it was underlined.
Technology and CDD are not incompatible. However, the mode and manner of carrying out the preventive measures, particularly CDD, may vary depending on how the covered person wants to integrate it with the new technology, according to the AMLC.
