The Philippines Can’t Get Off FATF’s Grey List

The Philippines Can’t Get Off FATF’s Grey List

The Philippines Can’t Get Off FATF’s Grey List

In Summary:

The Financial Action Task Force (FATF) is keeping the Philippines on the list of untrustworthy jurisdictions due to unresolved financial crime risksSince 2000 the Philippines have been coming off and back on the watchdog’s grey listThe country has made huge progress in terms of AML/CFT controls but there is still work to be done

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Following a meeting that lasted for four days, Paris-based international regulator, the Financial Action Task Force (FATF), has decided to keep the Philippines on its grey list. Despite progress on the anti-money laundering (AML) and combatting the financing of terrorism (CFT) front, the country still has work to do in order to be able to implement the proposed action plan by the watchdog.

The Philippines Have Been Bouncing on and off FATF’s List

In 2000, the Philippines were put on FATF’s list as there were major issues in the country’s ability to fight money laundering and discover individuals involved in terror financing. In 2005, the Philippines were removed from the list as they managed to incorporate the Anti-Money Laundering Act in their legislation, only to be put back on the list yet again in June 2012.

This continued back and forth until 2021 once gain the country ended up on FATF’s grey list as the watchdog recommended more scrutiny and AML/CFT controls over the so-called junkets, which to the day continue to pose considerable financial risks.  The Paris-based regulator also highlighted that it requires the country to show that it has implemented effective AML/CFT risk supervision targeted at businesses and professions that are not part of the banking system. Casinos and junkets fall into this category. Consequently, the Philippines will continue to be under increased scrutiny from the watchdog and shall have to report on their progress to FATF three times a year.

The Philippines’ Growing Casino Industry

The Philippines’ growing offline and online gambling industry is emerging as a serious contender to Macau, which currently duped the Las Vegas of Asia. The gambling sector in the country is mainly targeting customers from the Asia Pacific region. The Philippines have also been developing a couple of integrated resorts that could be in direct competition with Macau. They have also allowed current gambling license holders to offer online gambling, which gives the country a considerable advantage over the Chinese special administrative region where that is not allowed.

The Financial Action Task Force (FATF) is an international inter-governmental body based in Paris, which aims to fight money laundering and terrorist financing by bringing about legislative reforms in the national law of countries. FATF was established at a G7 summit held in Paris in 1989 and currently has 39 members.