Financial Crime World

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Financial Crimes in Emerging Markets: Philippines Struggles to Keep Pace with Global Anti-Money Laundering Efforts

Maintaining the integrity of financial institutions and the economy as a whole requires preventing activities that divert resources away from productive uses. The fight against money laundering and terrorist financing has become essential in maintaining economic stability.

The Philippine Response

The Philippines has been actively engaged in anti-money laundering (AML) and combating the financing of terrorism (CFT), with the Financial Action Task Force (FATF) taking the lead. However, despite its efforts, the country remains on FATF’s “gray list” of jurisdictions subject to increased monitoring for “dirty money” risks.

Anti-Money Laundering Act (AMLA)

The Anti-Money Laundering Act (AMLA) of 2001 serves as the framework for AML/CFT efforts in the Philippines. The law has been amended several times, with the latest amendment signed by President Rodrigo R. Duterte in January 2021. The Anti-Money Laundering Council (AMLC), the country’s financial intelligence unit, is tasked with implementing AMLA.

FATF Recommendations

Despite progress made, FATF still calls for improvement. Specifically, it urges the Philippines to:

  • Demonstrate effective risk-based supervision of designated non-financial businesses and professions
  • Supervisors using AML/CFT controls to mitigate risks associated with casino junkets

Casino Junkets and PAGCOR’s Role

The Philippine Amusement and Gaming Corp. (PAGCOR) is expected to play a crucial role in mitigating risks associated with casino junkets. PAGCOR has created the PAGCOR Anti-Money Laundering Supervision and Enforcement Department (PASED) and signed a memorandum of agreement with AMLC to enhance their capabilities in addressing AML/CFT issues.

Additional Recommendations

FATF also seeks progress on implementing new registration requirements for money or value transfer services, applying sanctions to unregistered and illegal remittance operators, and ensuring accurate and up-to-date beneficial ownership information.

Conclusion

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The Philippines’ continued efforts are necessary to prevent financial crimes from thriving in emerging markets. With global institutions like FATF taking the lead, it is crucial that the country implements effective measures to combat money laundering and terrorist financing.