Philippines unleashes anti-money laundering arsenal, aims to shine bright after grey list struggle

The Philippines is working hard to get off the global ‘grey list’ of money laundering by improving anti-money laundering frameworks.

The Philippines is actively working to remove itself from the Financial Action Task Force (FATF) money laundering ‘grey list’ by the end of this year as part of a strategic move to improve its international financial standing. The country’s Anti-Money Laundering Council has expressed optimism about this critical development, shedding light on the challenges and actions required to address the concerns that led to the country’s inclusion on the grey list in June 2021.

The FATF, a global intergovernmental organization dedicated to combating money laundering and terrorism financing, added the Philippines to its ‘grey list’ due to a variety of concerns. These included perceived money-laundering risks associated with casino junkets and a notable lack of prosecutions in cases involving terrorism funding.

Regardless of the challenges, there is optimism in the Philippines as it strives to meet the FATF’s stringent criteria for removal from the grey list. During a recent press conference at the presidential palace, Matthew David, executive director of the Anti-Money Laundering Council, expressed this optimism.

“The most difficult action item is the prosecution of terrorist financing.” “We need to file more terrorism financing cases,” David stated emphatically, highlighting a critical area that requires immediate attention.
David emphasized that several issues raised by the FATF must still be addressed. The prosecution of terrorist financing is at the top of the list of concerns, reflecting the urgency with which the Philippines must act to meet FATF standards. The longer a country remains on the grey list, the higher its ranking; According to David, the likelihood of being downgraded to the more severe “black list”.

The consequences of a downgrade to the black list would be significant, affecting millions of Filipinos living and working abroad who send billions of dollars in remittances to the Philippines regularly. Stricter requirements and higher transaction costs would inevitably follow, significantly impacting both the government and the Filipino diaspora’s financial landscape.

The difficult task of prosecuting terrorist financing is at the forefront of the Philippines’ efforts to meet FATF requirements. David acknowledged that addressing this issue will necessitate the filing of more cases involving terrorism financing, a task that will necessitate both diligence and efficiency from law enforcement and the judicial system.

The need to strengthen terrorism financing prosecutions stems from the FATF’s examination of the Philippines’ legal framework and its application in combating terrorism-related financial crimes. As the country navigates this challenge, it recognizes the importance of a quick and effective response to demonstrate commitment to international standards.

The threat of being demoted to the FATF’s ‘black list’ looms over the Philippines, heightening the urgency of its efforts. David emphasized that a prolonged stay on the grey list increases the risk of a downgrade, which would have far-reaching consequences for the country’s economic and financial landscape.

A move to the blacklist could result in stricter regulatory requirements and higher transaction costs for the millions of Filipinos living abroad who rely on remittances to support their families and make a significant contribution to the Philippine economy. The potential consequences of such a downgrade highlight the importance of the Philippines’ proactive approach to addressing FATF concerns.

The FATF’s investigation into the Philippines’ financial practices extends beyond national borders, with international stakeholders keeping a close eye on developments. The outcome of the Philippines’ efforts to remove itself from the grey list is critical not only for the country but also for international perceptions of the effectiveness of anti-money laundering and counter-terrorism financing measures.

The international community is watching the Philippines’ response to FATF concerns closely, viewing it as a litmus test for the country’s commitment to international standards and cooperation in combating financial crime.

As the world watches, the Philippines has an opportunity not only to improve its financial standing but also to contribute to the global fight against money laundering and terrorism financing. The coming months will be critical in determining the Philippines’ success and shaping its financial trajectory on the international stage.