Philippines remains on FATF watchlist, junket risk a concern

anti money laundering

The Philippines remains on the Financial Action Task Force’s (FATF) gray list after its latest review, with the anti-money laundering body continuing to express concern over monitoring of casinos and junkets.

The FATF put the Philippines back on its list of jurisdictions that are subject to increased monitoring in June last year.

The Paris-based organization said that since then the Philippines has taken steps to improve its AML and CFT regimes, but needs to continue to work to implement its action plan.

In particular, it needs to demonstrate effective risk-based supervision of designated non-banking financial businesses and professions, which includes casinos. It also needs to demonstrate that supervisors are using AML/CFT controls to mitigate risks associated with casino junkets, it said. 

Authorities also need to implement new registration requirements for money, or value transfer services and apply sanctions to unlicensed illegal remittance operators. 

There also needs to be an improvement in the use of financial intelligence and an increase in money laundering investigations and prosecutions in line with risk, the task force said. It adds that there needs to be a demonstrated increase in the identification and prosecution of terrorist financing cases, as well as demonstrating that appropriate measures are taken with regard to the non-profit sector. 

Grey list countries face increased monitoring from the anti-money laundering and terrorism financing body and need to submit more frequent reports to the organization. They also need to commit to deadlines to quickly resolve the deficiencies that have been identified.  

The Philippines passed new anti-money laundering legislation in January of last year. At the time, the government said it was confident that the law would help it avoid being placed on the list, which it said would be a further blow to its Covid-battered economy.

One of the amendments was the inclusion of Philippine Offshore Gambling Operators and their service providers as covered persons, who will need to report transactions in excess of P500,000 ($104,000).

Another was a requirement for all real estate transactions over PHP7.5 million to be submitted to the Anti Money Laundering Council (AMLC). Tax crime has also been included as a predicate offense to money laundering.

The Philippines was forced to step up its AML efforts after funds from a 2016 robbery at Bangladesh’s Central Bank found their way into Manila’s casinos. 

The case highlighted serious deficiencies in the country’s AML and CFT laws, with casinos not forming part of the legislation. Laws have subsequently been changed to bring them in line.