The Philippines Closer to FATF Grey List Removal
The Philippines has moved closer to being removed from the Financial Action Task Force (FATF) grey list after implementing eight significant reforms aimed at strengthening its anti-money laundering (AML) and combating the financing of terrorism (CFT) framework. These measures were highlighted in a recent update from the FATF, which monitors and assists countries with AML/CFT issues to prevent risks to global financial systems.
A skyline view of Metro Manila, Philippines at night. (Source: Wikipedia)
LISTEN TO THIS ARTICLE:According to the latest FATF review, the organization has determined that the Philippines has largely complied with its reforms, and an on-site assessment is now warranted to verify the practical implementation and sustainability of the AML/CFT improvements. The on-site assessment will evaluate whether these reforms are being effectively maintained and if the Philippines remains committed to addressing any remaining challenges.
The FATF added the Philippines to the grey list in June 2021, following concerns over weaknesses in its AML/CFT policies. Jurisdictions on this list often face challenges in capital flows, as being on the grey list signals to investors and international banks that a country may have vulnerabilities in its financial systems.
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A Work in Progress
The Anti-Money Laundering Council (AMLC) of the Philippines acknowledged the FATF's update with optimism, releasing a statement that welcomed the announcement and reaffirmed its commitment to removing the Philippines from the grey list by 2025. The council announced that the FATF's Asia/Pacific Joint Group will conduct an on-site visit to the Philippines in early 2025 to verify that reforms are in place and sustainable.
This visit will examine the implementation of the action items that the FATF has set for the Philippines to address. It will also assess the commitment of the government to continuously improve its AML/CFT regime.
Executive Secretary of the AMLC Lucas Bersamin stated that the FATF's acknowledgment of the Philippines' progress is a clear indication of the collective efforts and coordination among various government departments. He highlighted the government's dedication to meeting the FATF's rigorous standards and its commitment to strengthening the country's financial system. Bersamin conveyed confidence that the Philippines' progress in implementing these reforms would be further validated during the FATF's on-site assessment.
The Philippines has been under increased pressure to enhance its financial regulatory framework, especially with the scale of its gaming sector, which is considered vulnerable to money laundering activities. The country's substantial strides in AML/CFT reforms indicate a concerted effort to align its financial system with international standards.
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