By Luz Wendy T. Noble, Reporter
AMENDMENTS to the Anti-Money Laundering Act (AMLA) will need to be approved by Congress before the Christmas break to give enough time for its implementation, if the Philippines wants to avoid being included in the Financial Action Task Force’s (FATF) so-called “gray list.”
“Our view is that this is an ‘all or nothing’ deal with the Financial Action Task Force. If they do not adopt our proposal, we will be gray-listed. It is that simple,” Anti-Money Laundering Council Executive Director Mel Georgie B. Racela said in a Viber message to BusinessWorld.
The FATF gave the Philippines up to February 2021 to address the deficiencies in Republic Act No. 9160 (Anti-Money Laundering Act) and implement regulations to improve its efforts to curb money laundering and terrorist financing activities. The original deadline was in October, but it was moved to February due to the pandemic.
Congress is hoping to tackle the amendments to the AMLA, after the approval of the 2021 national budget. However, the timeline appears to be tight as Congress is scheduled to go on another break on Dec. 19 and resume session on Jan. 17, 2021.
House Bill No. 6174 is up for second reading approval, while Senate Bill No. 1412 is still pending at the committee level.
President Rodrigo R. Duterte certified the urgency of the proposed anti-money laundering law amendments.
Once the AMLA amendments are signed into law, Mr. Racela said the government needs to issue implementing rules and regulations; disseminate information; and send letters to the new covered persons to immediately register with the AMLC, before February.
“If given two months to implement, we can do all these. We need, at the earliest, end of November but latest in December before the Christmas break,” he said.
Quirino Representative Junie E. Cua House, chairman of the House Committee on Banks and Financial Intermediaries, said the amendments can be passed before the holiday break.
“I’m sure it will be prioritized…The revisions are not complicated. If we devote enough time, it can be done,” Mr. Cua said in Filipino over a phone interview with BusinessWorld.
Mr. Cua said there is resistance to the bill’s expansion of covered persons under the AMLA to include real estate developers and brokers due to the amount of work involved in reporting transactions. He noted this can be addressed through an electronic reporting system that will make compliance easier.
“The consequence of not doing it [revisions] is also something that we should think about as a nation. If we get gray-listed, it will have a big implication for all,” Mr. Cua said.
Other proposed revisions to the AMLA include expanding AMLC’s investigative powers to include the issuance of subpoenas and the implementation of targeted financial sanctions — including freezing assets, among others.
In 2000, the Philippines was included in the FATF’s list of countries with lax safeguards against dirty money transactions. The country was removed from the list in February 2005.
In a worst-case scenario that the Philippines is gray-listed by the FATF, Mr. Racela said it may take around two to three years before it can be removed from the list.
“We are already under the 12-month observation period — this means we need to convince the FATF that we should be taken out from the observation period. This means that if we fail to act or deliver a different matter, gray-listing will naturally follow,” he explained.
The FATF’s recommendation in relation to counter-terrorism financing have already been addressed by the passage of the controversial R.A. No. 11479 or the Anti-Terror Act of 2020.
If the Philippines is included in the FATF’s gray list, officials have warned there may be a decline in remittances due to delayed processing of transactions, and possible reluctance from international financial institutions to conduct businesses in the Philippines due to increased paperwork involved.