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PHL removed from dirty-money list

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By Melissa Luz T. Lopez
Senior Reporter

THE PHILIPPINES has been removed from the watch list of a regional unit of the Financial Action Task Force (FATF) following a new law that requires casinos to report daily deals to regulators, as the global watchdog recognized “significant progress” in combatting dirty-money deals.

In its meeting last month, the Asia/Pacific Group on Money Laundering (APG) — the FATF’s regional body tasked to monitor compliance of countries in the region — decided to pluck the Philippines off its list of jurisdictions needing further evaluation given existing gaps in laws and regulations.

“During the annual meeting, the Philippine delegation reported to APG membership that the casino bill has been signed into law by the President. As such, the Philippines has been taken out from APG membership action,” the Anti-Money Laundering Council (AMLC) said in a statement following the watchdog’s July 17-21 meeting in Sri Lanka.

A separate statement from the APG’s Web site also showed that the Philippines “exited transitional mutual evaluation follow-up in recognition of their significant progress in implementing the FATF standards.”

Headquartered in Sydney, Australia, the APG is the designated regional body that tracks the anti-money laundering regimes of the Philippines and 40 other states on behalf of the FATF.

On July 14, President Rodrigo R. Duterte signed Republic Act No. 10927 that requires all casinos, including Internet and ship-based gaming tables, to report daily transactions worth at least P5 million to the AMLC.

This move was expected to address the APG’s 2009 assessment that the exclusion of casinos as reporting entities to the AMLC raised “significant concerns” on curbing dirty money deals, citing the big volumes that pass through gaming tables.

Other gaps identified in the APG’s 2009 assessment report include the AMLC’s “limited authority” to directly access bank records, as well as the limited coverage of the law in requiring non-financial businesses and professions to report big-volume, suspicious transactions to the watchdog.

Afghanistan, Brunei Darussalam, Nepal, Pakistan, Taiwan and Vietnam were likewise removed from the APG’s list of areas needing follow-up evaluations, following reforms that improved their respective safeguards against money laundering.

The AMLC noted that the Philippines was removed from the FATF’s “grey list” back in 2013, but still had to address policy gaps with close monitoring from the regional watchdog APG.

Prior to this, the country averted being blacklisted by the international watchdog after a “high-level political commitment” by the administration of former president Benigno S.C. Aquino III to plugging loopholes in the campaign against illicit fund flows.

The global body sets international standards for combating money laundering and fund flows for terrorism, placing countries in three categories, namely: “gray list,” “dark gray list” and “black list.” Blacklisting entails sanctions that would make financial transactions with affected countries expensive.

In February last year, Philippine casinos were used by still-unidentified thieves to launder $81 million stolen from the Bangladesh central bank’s accounts with the Federal Reserve Bank of New York, which is the biggest cross-border money-laundering incident, so far, that has hit the country.

Of the amount that found its way into the Philippines, only about $15 million has so far been returned to Dhaka.

The new law signed by Mr. Duterte last month now counts all casino operators and gaming tables as reporting institutions to the AMLC.

“The need to regulate the casino sector in the Philippines has long been identified by its assessment body, the Asia Pacific Group, and was further stressed by the FATF in a public statement in June 2013. It has been the focus of ongoing scrutiny since then,” FATF Executive Secretary David Lewis said in a July 27 e-mailed reply to questions.

“Action to address this is, therefore, long overdue but nonetheless welcome.”

AMLC chairman and Bangko Sentral ng Pilipinas Governor Nestor A. Espenilla, Jr. previously said that the new law would “plug a critical gap” and would boost efforts to stop the dirty money deals in the country.

Earlier this year, the US Department of State tagged the Philippines as a “major” money laundering site in 2016 due to reported cases of public corruption, human trafficking and drug transit.

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