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PHL to face third round of evaluation on anti-money laundering safeguards

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THE PHILIPPINES will undergo a third evaluation process to assess its compliance with global standards on safeguards against dirty money, the Anti-Money Laundering Council (AMLC) said.

In a statement posted on its website, the AMLC said the Philippines will go through the third round of mutual evaluations (ME) this year, which will check whether current anti-money laundering systems in place are largely compliant with international rules.

The AMLC, which serves as the country’s financial intelligence unit (FIU), will lead a government-wide review for rules and processes designed to combat dirty money and terrorist financing onshore.

The review will be carried out by the Asia Pacific Group (APG) on Money Laundering. 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 Financial Action Task Force (FATF).

The AMLC said the Philippines “has come a long way” since the last mutual evaluation done in 2009, noting that reforms which took effect the past decade have allowed the Philippines to plug loopholes in local laws.

In particular, the watchdog said “most of the deficiencies identified in the second ME have been addressed” through the passage of new laws, namely Republic Act (RA) No. 10168 or the Terrorism Financing Prevention and Suppression Act of 2012 and RA 10365 which added more predicate offenses under money laundering crimes.

RA 10927 signed into law last year also boosted defenses versus dirty money as it required all casinos — including Internet and ship-based gaming tables — to report daily transactions worth P5 million or higher to the AMLC.

Other gaps identified under 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 and suspicious transactions to the regulator.

The Philippines has been removed from the APG’s watch list as of July 2017 as the body recognized “significant progress” made in terms of combatting illicit money.

The latest round of evaluations involve a technical review due in May, and a more comprehensive report to be submitted by authorities in July. APG representatives will then visit the Philippines by November to conduct on-site assessments, the results of which to be published in 2019.

Under the latest round of evaluations, existing laws, regulations and legal issuances will be reviewed against FATF standards, and will be classified as compliant, largely compliant, partially compliant, or non-compliant.

A poor rating in the ME due to non-compliance and low effectiveness of current anti-money laundering systems will place the Philippines back to monitoring for being a “high-risk” jurisdiction, the AMLC said.

“After establishing an FIU and a system for reporting covered and suspicious transactions, the country has continuously sought to strengthen its role in the financial system by enforcing its mandates under the AMLA, as amended,” the AMLC statement read.

“Surpassing the ME requires not only narrating but also showing that the country conforms to international standards and that the systems in place achieve their purpose,” AMLC Secretariat executive director Mel Georgie B. Racela was also quoted as saying.

National money laundering threat level remained “high” from 2015-2016, according to the second national risk assessment report published by the AMLC in December. This is essentially unchanged from the previous report covering the years 2011 to 2014, with the Philippines posing as a safe haven for both domestic and international criminals seeking to cleanse and stash their loot. — Melissa Luz T. Lopez