EDITORIAL - A dirty money black hole
On the first regular working day of the year, among President Marcos’ marching orders to several agencies was to get the country out of the so-called gray list of the Financial Action Task Force. Since June 2021, the Philippines has been in the Paris-based FATF’s gray list of countries and territories under close monitoring for money laundering.
The FATF set a deadline of January 2023 for the Philippines to address 18 deficiencies in anti-money laundering and combating the financing of terrorism controls. But the Philippines failed, and sought an extension until January 2024. Last October, the International Monetary Fund had urged the country to intensify efforts to get out of the gray list as the FATF noted that eight of the 18 deficiencies have not been sufficiently addressed. Increased monitoring for dirty money makes financial transactions more difficult in the Philippines, including the remittance of earnings by millions of overseas Filipino workers.
Among the deficiencies are inadequate controls to mitigate risks associated with casino junkets, and insufficient registration of designated non-financial businesses and professions such as lawyers, accountants and jewelry shops. The FATF also wants to see increased identification, investigation and prosecution of money laundering and terrorist financing cases. The country must also enhance and streamline law enforcement agencies’ access to accurate and up-to-date beneficial ownership information.
Among the agencies covered by President Marcos’ order, apart from the Anti-Money Laundering Council, are the Bureau of Customs, the Philippine Amusement and Gaming Corp. and the Anti-Terrorism Council.
For the past decade, a strong gambling lobby had protected casino junkets from close scrutiny by anti-money laundering authorities. In 2016, the country was described as a convenient “black hole” after $81 million hacked from the New York Federal Reserve account of the Bangladesh central bank vanished after being funneled to two casinos and a junket operator in the Philippines.
Political vested interests also slowed Philippine compliance with rules that included corruption among the offenses covered by anti-money
