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Gray list beneficiaries?

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The International Monetary Fund has urged the Philippines to ramp up initiatives to strengthen its anti-money laundering and combating the financing of terrorism framework (AML/CFT) if it wants to be removed from the gray list of global dirty money watchdog Financial Action Task Force (FATF).

“Efforts to be removed from the FATF gray list should be stepped up and would benefit from the publication of a credible timeline to address AML/CFT issues,” said Shanaka Jayanath Peiris, mission chief of the 2023 IMF Article IV consultation team.

The Philippines reentered the gray list on June 2021, after a mutual evaluation report of the Asia-Pacific Group on money laundering (APG) showed the country failed to address 18 deficiencies in AML/CFT controls.

Two years after, the country remains in the list of jurisdictions under increased monitoring in June, as the country has yet to address eight of the 18 concerns that put it there.

Although significant progress has been made over the two-year period, the Philippines still needs to demonstrate the implementation of AML/CFT controls to mitigate risks associated with casino junkets, as well as increase money laundering and terrorist financing investigations and prosecution of terrorist financing cases.

Other deficiencies include the demonstration that the effective risk-based supervision of designated non-financial business and professions (DNFBPs) is occurring, the enhancement and streamlining of law enforcement agencies’ access to beneficial ownership information and taking steps to ensure that beneficial ownership information is accurate and up to date, as well as the need to show an increase in the identification, investigation, and prosecution of terrorist financing cases.

Despite the point by point list of deficiencies, with matching action needed to be taken, failing to address almost half over a period of two years explains why our country remains in the gray list. Our government agencies responsible for getting us out of that list that still labels our financial system as exploitable by unscrupulous groups or individuals must do better if they don’t want to be accused of dragging their feet to benefit certain interests who prefer to have easier money laundering and terrorist financing options available.*

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