PHL central bank addresses FATF recommendations vs financial crimes

THE PHILIPPINE central bank is focusing on showcasing tighter regulations on registration of money transfer services and the effectiveness of targeted financial sanctions, as it aims to exit the “gray list” of the Financial Action Task Force (FATF) by next year.

The country is hoping to convince the FATF it is effectively implementing tighter measures against money laundering and counter-terrorism financing, after the Philippines was included in the gray list in June 2021.

“The BSP is implementing measures to address the three action-plan items relating to implementing the new registration requirements for money or value transfer services, applying sanctions on unregistered and illegal money remittance operators, and enhancing the effectiveness of the targeted financial sanctions framework (TFS) for both terrorism financing and proliferation financing,” the BSP said in its annual report.

“It [The BSP] will ensure that the remaining action plan items for BSP and BSFIs (BSP Supervised Financial Institution) will be adequately addressed, in line with the country’s strong commitment to address all identified strategic deficiencies to exit from the gray list,” the BSP added.

The FATF said in March the country is still part of jurisdictions under increased monitoring for “dirty money” risk, although it noted the country’s progress in terms of policies related to sanctions against terrorism financing and increasing manpower of the Anti-Money Laundering Council (AMLC).

The FATF said it will continue to monitor the country’s anti-dirty money and counter-terrorism financing measures, particularly its progress in implementing registration requirements for money or value transfer services, as well as imposing sanctions against illegal operators.

For its part, the BSP said it has formed a group that tracks and collates actions and countermeasures seen in other jurisdictions. The central bank likewise said it catalogs incidents related to de-risking and correspondent banking, among others.

“The information gathered will be used in implementing appropriate policy responses and other necessary interventions,” it said.

The BSP regulates money service businesses that are engaged in remittances, money transfers, and foreign exchange dealership, as well as those related to virtual assets.

There are more than 7,000 of these businesses that are registered with the BSP as of end-2021.

The government will submit its next progress report to the FATF in May. Officials hope the country will be removed from the gray list by January 2023. — Luz Wendy T. Noble