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Philippines Takes Steps to Combat Money Laundering
The Philippines is taking concrete steps to combat money laundering and terrorist financing, aiming to secure removal from the Financial Action Task Force’s (FATF) “grey list” of jurisdictions under increased monitoring.
Reporting Suspicious Transactions
- The Anti-Money Laundering Council (AMLC) emphasizes the importance of reporting suspicious transactions to its authorities.
- This includes banks, offshore banking units, quasi-banks, trust entities, non-stock savings and loan associations, pawnshops, foreign exchange dealers, money changers, and other financial institutions.
Training Staff on AML Regulations
- Financial institutions must train their staff on Anti-Money Laundering (AML) regulations and suspicious transactions.
- This includes identifying and reporting suspicious transactions, as well as maintaining accurate records.
Record Keeping and Cooperation with Authorities
- Financial institutions are required to maintain accurate records of all transactions and cooperate with authorities in investigations.
- This includes implementing transaction monitoring systems to detect and report suspicious activities.
Transaction Monitoring and Regular Audits
- Financial institutions must implement transaction monitoring systems to detect and report suspicious activities.
- Regular audits must be conducted to ensure compliance with AML regulations.
Client Risk Categorization and Monitoring
- Financial institutions must categorize clients based on their risk level and monitor them accordingly.
- This includes implementing enhanced due diligence measures for high-risk clients.
Continuous Monitoring
- Continuous monitoring is crucial to detect and prevent money laundering activities.
- Financial institutions must remain vigilant and adapt to new threats and risks.
Entities Affected
The following entities are required to register with the AMLC reporting procedure:
- Banks
- Offshore banking units
- Quasi-banks
- Trust entities
- Non-stock savings and loan associations
- Pawnshops
- Foreign exchange dealers
- Money changers
Penalty for Money Laundering
According to the Anti-Money Laundering Act (AMLA), the crime of money laundering is punishable by imprisonment ranging from seven to fourteen years and a fine of not less than PHP 3,000,000.00 but not more than twice the value of the monetary instrument or property involved in the offense.
Impact of Being on the “Grey List”
Being on the FATF’s “grey list” has significant implications for a country’s financial and economic standing, including:
- Increased scrutiny from international financial institutions and regulatory bodies
- Stricter due diligence from financial institutions dealing with entities from grey-listed countries
- Challenges in accessing international financial markets, as investors and financial institutions may become more cautious about engaging in transactions with entities from grey-listed jurisdictions
- Negative impact on economic growth
Solutions
To help financial institutions comply with AML regulations in the Philippines, the Sumsub team has compiled essential tools, checks, data, and documents. You can download the compliance guidelines for free by clicking the button below.