Diokno cites whole-of-government approach to exit from gray list

By Joann Villanueva

July 1, 2021, 7:25 pm

MANILA – Demonstrating the effectiveness of policies, not just enactment of laws that fight money laundering and terrorist financing, is needed for the Philippines to be removed from the gray list of the Financing Action Task Force (FATF).

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno, in a virtual briefing on Thursday, said the country was able to address the technical deficiencies cited under the Third Mutual Evaluation by international money laundering authorities after the passage of the Anti-Terrorism Act of 2020, or the Republic Act 11479, and RA 11521, which further amends the Anti-Money Laundering Act of 2001.

He, however, noted that these measures are not enough because “we have to demonstrate effectiveness.”

“Thus, the country has been identified as a “jurisdiction under increased monitoring” generally because the Philippines would need time to implement its new AML/CTF (anti-money laundering/counter-terrorism financing) laws, regulations, and other relevant issuances to demonstrate their effectiveness,” he said.

The recent inclusion of the Philippines in the gray list is not the first time for the country after 2000, or prior to the enactment of the Anti-Money Laundering Act of 2001 (AMLA).

The country was removed from the list only in 2003 after the Asia Pacific Group on Money Laundering (APG) Review Group confirmed that the country was effectively implementing AML measures and after the enactment of RA 9194, which amended the AMLA.

However, it was again placed on the gray list in 2010 and was even downgraded to “dark gray list” in 2012 for failure to meet the deadline to address counter-terrorism financing (CTF) laws.

The country was transferred back to the gray list only after the passage of RA 10167 and the Terrorism Financing Prevention and Suppression Act of 2012.

Diokno said the country needs to address the 18 International Co-operation Review Group (ICRG) action plan items within the timeline set by FATF to be able to show effectiveness in implementing AML/CTF laws and regulations.

“Let me make this very clear: accomplishing these 18 action items should be the concern of the entire country. A whole-of-government approach is imperative as evident in the Philippines’ National Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Strategy for 2018 to 2022 (NACS),” he said.

Relatively, Diokno said there has been no cost on crossborder banking following the Philippines’ inclusion in the FATF gray list a few days ago.

“To date, we have not observed any changes in the cost of the cross-border banking due to the recent FATF statement relative to the list of jurisdictions under increased monitoring. The BSP will continue to monitor developments in this space and closely engage the industry to provide necessary guidance or assistance to our supervised financial institutions,” he added. (PNA