THE NEXT administration needs to be willing to tweak the National Anti-Money Laundering and Countering the Financing of Terrorism Strategy (NACS) to strengthen the Philippine case for exiting the gray list of the Financial Action Task Force (FATF) by 2023, a regulator said.
“A change in administration means the new administration must be briefed and convinced to approve the updated NACS to continue the momentum and to commit in the accomplishment of the action plan items until January 2023,” Anti-Money Laundering Council (AMLC) Executive Director Mel Georgie B. Racela said in a Viber message.
The current NACS was adopted in 2018 and is in effect until 2022. Mr. Racela said the AMLC is in the process of updating the NACS to take into account the action-plan items which the FATF said need to be addressed in order to leave the gray list.
AMLC Chairman and Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno has said that the target to exit the FATF’s gray list was January 2023. The timeline takes into account the looming change of government.
In July, the AMLC opened a satellite office in order to extend its capabilities in compliance with FATF recommendations. Mr. Racela said the new office in Quezon City will be home to AMLC’s compliance and supervision group which focuses on conducting examinations for covered entities, and the litigation and evaluation group, which is in charge of filing freeze orders and bank inquiries, among others.
Mr. Racela said the council is currently hiring more financial intelligence analysts, investigators, lawyers, and other personnel.
“There will be an election ban on hiring. This is why we are preparing for it as early as now. We intend to fully fill vacancies in our Financial Intelligence Analysis Group even before the election ban,” Mr. Racela said.
Meanwhile, the AMLC will implement its revised registration and reporting guidelines in two stages, with most items in place by Aug. 8. Some of the rules will be mandatory for covered persons by Jan. 9, 2022.
In an advisory posted on its website, the AMLC said general provisions of the revised guidelines implemented this month include a new list of covered persons, particularly real estate developers and brokers, whose transactions are potential risks for money-laundering.
The guidelines delegate authority to Mr. Racela to require submission of all covered transactions of persons subject to AMLC oversight. New provisions on compliance-checking and administrative sanctions are also now in force.
This month, amendments to the reporting guidelines include an enumeration of red flags for suspicious real estate and virtual asset transactions, as well as industry guidelines for insurance companies on covered and suspicious transaction reporting.
By Jan. 9, amendments related to the easing of reporting requirements on loan payments categorized as a low-risk will be in force. Going into effect are a list of events that trigger suspicious-transaction report filing, the new format for reporting loans availed, the reporting procedures for the sale of real and other properties acquired held by financial institutions, and the updating of country and currency codes.
Mr. Racela said some amendments have been pushed back for enforcement to allow covered persons to modify their systems to comply.
“The AMLC also takes into consideration that some covered persons outsource or have external providers for their anti-money laundering and counter-terrorism financing systems. Thus, more time is necessary to carry out these enhancements,” Mr. Racela said.
The Philippines needs to show tangible progress in implementing anti-money laundering and counter-terrorism financing (AML/CTF) laws by addressing 18 action plans before exiting the gray list, which it re-entered in June.
Republic Act No. 11521 which amended the Anti-Money Laundering Law was signed into law on Jan. 29, days ahead of the Feb. 1 deadline set by the FATF to demonstrate effective AML/CTF measures. Republic Act No. 11479 or the Anti-Terror Act of 2020 was passed in July 2020 to address gaps in CTF regulation.
The first progress report to the FATF since joining the gray list is due in September. — Luz Wendy T. Noble