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BSP sets January 2024 goal for FATF gray list exit

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DESPITE missing its exit from the Financial Action Task Force’s (FATF) gray list, the Bangko Sentral ng Pilipinas (BSP) is still bent on accomplishing this by January 2024.

On the sidelines of a forum hosted by the Philippine Chamber of Commerce and Industry (PCCI) on Monday, BSP Governor Felipe M. Medalla told reporters that countries who exited the gray list had to “do a lot” and that it took them years.

The FATF flagged the country for supposed inadequacies in the effectiveness of the targeted financial sanctions framework (TFS) for both terrorism financing and proliferation financing.

“Right now, the key month is January next year because that’s the time they will review it. Hopefully, we’ll be out [of the gray list]. But, of course there’s a possibility that it will take longer to get out. Some countries took four years to get out and they had to do a lot,” Medalla said.

Medalla said one country, Pakistan, was only able to exit the gray list after hiring 3,000 more workers to follow up all the investigations and file cases on terrorist financing.

“We hope we are able to satisfy them with just better enforcement. We may have to hire people but obviously, it’s not going to be the AMLC [Anti-Money Laundering Council] that will hire people. Because if your problem is prosecution, filing cases, that has to be a line agency that has to do that,” Medalla said.

Earlier, Medalla said the main challenge in exiting from the gray list is enforcement since the country has already passed the necessary legislation, except for the amendment of the Bank Secrecy Law.

He stressed that currently, there are few Filipinos being prosecuted and convicted for terrorism financing and proliferation financing.

Nonetheless, Medalla said, his meeting with the Department of Justice (DOJ) showed that if the country was “more diligent” in using a system to record these prosecutions and convictions, the numbers could be higher.

Landing on the FATF grey list does not automatically result in sanctions kicking in, but could cause prolonged procedures in some financial transactions—something Philippine authorities are keen to avoid in order not to inconvenience, for instance, the millions of migrant workers whose remittances shore up the economy.

Image credits: Patrick Roque via Wikimedia Commons CC BY-SA 4.0

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