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Philippine President Rebukes Potential FATF Blacklisting
Josh O'Neill
6 January 2017
In light of local media reports that the Philippines risks being blacklisted by the due to changes in management of the country's Anti-Money Laundering Council, the presidential office has dismissed the claims, saying that the threat is baseless. According to Transparency International, a group tracking corruption and governance worldwide, the Philippines ranks 35 out of 100 on a score based on TI's Corruption Perceptions Index 2015. The top country, (ie, least corrupt), at 91 out of 100, was Denmark. By comparison, Malaysia, currently embroiled in a scandal around payments linked to its state-owned 1MDB fund, ranks at 50. The 1MDB saga has seen a number of Singapore-based banks kicked out of the Asian city-state (Singapore ranks at eighth, with a score of 85).
Earlier this week, several news services in the Philippines reported that sources warned the country it could be embargoed by the global financial crime watchdog if a proposed bill that exempts the central bank's governor from overseeing the AMLC is passed into law.
The FATF – an international body that promotes policies aiming to combat money laundering and terrorist financing - upgraded the Philippines rating from its “dark grey list” to its “grey list” in 2012 as a result of government initiatives to enhance transparency and accountability mechanisms in financial transactions.
However, last year the Philippines narrowly evaded the FATF's blacklist after becoming embroiled in a money laundering scandal wherein $81 million worth of funds from the Bangladesh Bank were laundered in Philippine casinos using Rizal Commercial Banking Corporation as a conduit. Under the country's anti-money laundering legislation, casinos are not required to report any questionable transactions to the government.
The Philippines' president, Rodrigo Duterte - known for his tough stance on illegal drugs, extrajudicial killing, and involvement in the killing of three kidnapping suspects in the 1980s - has previously expressed anger towards the AMLC for being uncooperative in building cases against those involved in the illegal drugs trade. This conflict of interest supposedly prompted former president Gloria Macapagal Arroyo to file the aforementioned proposed bill, which seeks to prevent the Bangko Sentral ng Pilipinas governor's involvement with the AMLC.
Commenting on the latest developments, presidential spokesperson Ernesto Abella said: “The Financial Action Task Force (FATF) potential blacklist over changes in the chairmanship of AMLC has no basis. The president has not given his imprimatur on the Anti-Money Laundering Council (AMLC) changes. He simply complained of some AMLC members of serving other masters. The bill proposed by Representative Gloria Arroyo has to undergo deliberation in Congress. We therefore expect that the FATF blacklist risk mentioned would be considered during the discussion.”