Philippines could land back in FATF blacklist

MANILA, Philippines - The Philippines could land back in the blacklist of the Financial Action Task Force on Anti Money-laundering, making the country's financial transactions, especially remittances, a target for costly scrutiny. The World Bank and the Asia Pacific Group on Money Laundering are scheduled to conduct a joint evaluation of the Philippines in October this year. The FATF blacklist has been empty since countries complied with FATF standards but officials fear that recent developments could make the Philippines the first and only country to be removed and reinstated for insufficient application of FATF recommendations. The Anti Money Laundering Council (AMLC) is still tangled in a legal tussle with the Supreme Court over a decision that prevented the council from conducting bank inquiries without informing account holders. The APG and the Financial Action Task Force both conduct periodic reviews that examine compliance with international anti-money laundering standards. Filing appeals on behalf of the AMLC, the Office of the Solicitor General in a 38-page motion for reconsideration asked the SC to consider setting aside a decision that, in effect, prevented the AMLC from examining bank accounts ex parte. Solicitor General Agnes Devanadera argued that the nature of bank inquiries conducted by the AMLC was like a search warrant, which has to be issued without notification of the parties concerned. "It is undeniably issued ex parte precisely because notice and hearing prior to issuance would frustrate its objective," Devanadera said. Requiring notice and hearing, according to Devanadera, would give the account holder the opportunity to conceal the property, leaving authorities with an empty bag by the time the search is conducted. "While any further inquiry may allow government to obtain the desired information, the forfeiture or recovery of the proceeds…becomes illusory," Devanadera said. Devanadera argued further that a bank inquiry was more an asset discovery tool but also an asset recovery tool since the law required that recovery of criminal proceeds must follow immediately. The disagreement had been the focal point of the legislation of the Anti Money Laundering Act, which had to be amended to satisfy the FATF requirements. Officials fear that the SC decision could land the Philippines back in the list of Non-Cooperative Countries and Territories (NCCT), which had been empty since the blacklisted countries complied with anti-money laundering standards. Hopping back into the NCCT list would make the Philippines the first and only country to be removed and reinstated for insufficient application of FATF recommendations. According to Devanadera, even if the country did not immediately end up in the NCCT list, countries could apply appropriate counter-measures against transactions originating in the Philippines or involving Philippine nationals and entities. Before the AMLA was amended, Devanadera recalled that the US Financial Crimes Enforcement Network singled out the Philippines and related transactions for scrutiny, causing problems in correspondent banking, trade and commerce. "Counter measures may further include limitations on migration," Devanadera added. The fall-out would also include possible suspension of the country's standing in international financial intelligence groups such as the so-called Egmont Group, which facilitate exchange of critical financial data between jurisdictions. - GMANews.TV