Avoiding the gray list

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The Anti Money Laundering Council warned that the Philippines is in danger of being included anew in the gray list of the Paris-based watchdog Financial Action Task Force (FATF) if the country fails to pass the necessary amendments to the anti-money laundering law.

AMLC Secretariat executive director Mel Georgie Racela said the Philippines needs to pass and implement further amendments to the Anti-Money Laundering Act (AMLA) to avoid inclusion in the FATF – International Cooperation Review Group gray list.

Proposed amendments to the law include inclusion of tax crimes as predicate crimes to money laundering, as well as the inclusion of real estate developers and brokers who engage in buying and selling of real properties. The changes also aim to further strengthen the AMLC by granting it subpoena and contempt powers.

Failure to pass and implement the amendments to the AMLA, as amended, before February 2021 will result in the country’s return to the dreaded FATF-ICRG gray list.

Inclusion in the gray list would publicly identify the Philippines and its citizens as a risk to the international financial system for having strategic deficiencies in anti-money laundering/combating the financing of terrorism framework. A consequence would be an additional layer of scrutiny from regulators and financial institutions, thereby increasing the cost of doing business with Filipinos, delays in the processing of transactions, and blocking the country’s road to an A credit rating.

The Philippines’ observation period had already been extended to February 2021 due to the COVID-19 pandemic. The AMLC is required to submit a comprehensive report on the progress in implementing the recommended actions after a review in April. The FATF will decide by June 2021 whether or not our country will be included in the gray list.

With four months left to pass and implement the proposed amendments to the AMLA, our legislators will have to add it to their list of priorities if we are to avoid the dreaded gray list. Hopefully they can give it the same attention and determination as they did in the shutdown of ABS CBN and the passage of the Anti-Terrorism Act of 2020 which can be counted as among the highlights of our legislative body’s track record during this particularly difficult year for Filipinos.*


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October 2020