AMLC seeks stronger mandate vs. terrorist financing

The Anti-Money Laundering Council (AMLC) is proposing amendments to the Anti-Money Laundering Act of 2001 (AMLA) and the Human Security Act of 2007 (HSA) to strengthen its powers against terrorist financing.

The amendments were crafted by the AMLC following the results of the Mutual Evaluation assessment on technical compliance with international anti-money laundering/counter-terrorism financing (AML/CTF) standards.

The council also took into consideration how effective is the country’s anti-money laundering and counter-terrorism financing mechanisms.

The amendments proposed by AMLC are as follows:

• include real estate developers, brokers, and sales agents in customer due diligence, recordkeeping, and suspicious transaction reporting

• include predicate offenses to money laundering such as certain tax crimes, proliferation financing by managing the trade in strategic or dual-use goods which are materials that may be used in manufacturing nuclear weapons

• expand the council’s investigative powers

• authority to implement targeted financial sanctions related to terrorism, terrorism financing, proliferation, or proliferation financing on designated persons and entities identified in the resolutions of the United Nations Security Council

• prohibit the issuance of injunctive relief against AMLC actions

• ensure the operational independence of the AMLC and its secretariat

The council also seeks to amend provision of the Human Security Act of 2007 as follows:

• designation of particular individuals as terrorists

• criminalization of financing travel for purposes of committing terrorist acts

• criminalization of foreign terrorist fighters

• inclusion of the definition “proliferation of weapons of mass destruction” to lay down the framework for implementing targeted financial sanctions against proliferation financing

• strengthen the powers of intelligence and law enforcement agencies to prevent, detect, and combat terrorism

• facilitate the legal process in obtaining data related to terrorism and terrorism financing

The proposed amendments were made to address deficiencies as well as to raise the Philippines’ level of technical compliance with the Financial Action Task Force (FATF) standards, the AMLC noted.

The amendments must be accomplished by October 2020, the council said.

“In the last quarter of 2020, the Asia Pacific Group on Money Laundering (APG) – Joint Group will review if the Philippines has moved toward implementing the MER’s recommended actions, most of which are encapsulated within the AMLC’s proposed amendments to the AMLA and the HSA,” it said.

“Failure to implement key recommended actions will result in the automatic referral of the Philippines to the International Co-operation Review Group (ICRG) or to gray-listing’,” it added.

The FATF requires all countries to notify their financial institutions of “gray-listed” countries and to consider measures to effectively manage the risks of transactions with individuals and entities from those listed countries.

In particular, the European Union requires its members to apply enhanced due diligence on individuals and entities from listed countries, according to the AMLC.

“This includes additional inquiries before opening accounts or engaging in transactions, thus creating a mandatory barrier and increasing the cost of doing business in Europe for said individuals and entities.”

“Often, listing results in de-banking or refused transactions. It is the APG’s experience that the FATF listing has a significant financial impact on countries as a result of the EU requirements,” the council said.

With a reinforced council coupled with closer collaboration among government agencies concerned, AMLC Chairman Benjamin Diokno is optimistic it can successfully address the country’s shortcomings in anti–money laundering and counter terrorism financing. —Ted Cordero/VDS, GMA News