Financial Crime World

FATF Greylist: Philippines Makes Progress on Anti-Money Laundering Action Plan

The Financial Action Task Force (FATF) has recently released a report highlighting the significant progress made by the Philippines in addressing its anti-money laundering (AML) and combating the financing of terrorism (CFT) action plan items. Despite this progress, there are still some areas that require attention.

Progress Made

The Philippines has largely addressed 11 out of 21 action plan items, demonstrating an increase in money laundering investigations and prosecutions, as well as enhanced financial intelligence and asset tracing capabilities. The country has also implemented measures to strengthen its framework for confiscation of proceeds of crime and enhance international cooperation mechanisms.

Strengthening Law Enforcement and Prosecutorial Capacity

The FATF praised the Philippines’ efforts to address strategic objective 2, which focuses on strengthening law enforcement and prosecutorial capacity for effective development of financial intelligence, investigation, prosecution, and confiscations in relation to money laundering and its predicate offenses. The country has implemented several initiatives, including:

  • The Deputized AMLC Financial Investigators (DAFI) framework
  • Increased manpower complement at the Anti-Money Laundering Council (AMLC)

Remaining Challenges

Despite progress made, there are still some areas that require attention. The FATF noted that:

  • The number of money laundering investigations and prosecutions remains relatively low, particularly in relation to other high-risk crimes.
  • There is a need to sustainably increase the number of seizures and confiscation actions, including as part of criminal actions.
  • The Philippines has not fully utilized its formal and informal international cooperation mechanisms when transnational elements and foreign proceeds are identified in ongoing investigations. This includes a low number of outgoing mutual legal assistance requests.

Outstanding Action Plan Item

The FATF highlighted that there is still one action plan item that has not been addressed: implementing measures to prevent and disrupt terrorism financing, including through the implementation of measures to identify, investigate, and prosecute terrorism financing.

Next Steps

To address these outstanding issues, the Philippines’ relevant agencies have committed to:

  • Continue implementing their respective action plan items
  • Strengthen inter-agency coordination mechanisms to ensure sustained progress

The Philippine government has emphasized its commitment to addressing the remaining action plan items and exiting the FATF greylist. “We are confident that our efforts will lead to tangible progress in combating money laundering and terrorism financing,” said a government official.

Conclusion

While the Philippines has made significant progress in addressing its AML/CFT action plan items, there is still work to be done. The country must continue to prioritize these efforts to ensure that it meets the FATF’s requirements and exits the greylist. Failure to meet the FATF’s requirements could result in stricter sanctions, including increased scrutiny from international financial institutions and potential blacklisting.

The Philippines’ efforts to address AML/CFT risks are crucial to preventing financial crimes and protecting the country’s economy.