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The Philippines is no longer on the European Commission’s high-risk list due to a positive change in the country’s anti-money laundering (AML) operations. This is a step forward for the country after the Financial Action Task Force (FATF) recognized the Philippines’ efforts in resolving compliance issues in February.
In a statement made on Tuesday, the European Commission mentioned the removal of eight countries from the high-risk jurisdictions list because they made substantial advances in establishing an AML and counter-terrorism financing framework. This is a big win for the Philippines as it seeks to resolve issues remaining from previous global evaluations.
FATF Recognition Paves the Way
The change comes as a result of the FATF decision to remove the Philippines from the “grey list.” This followed observed improvements in the country’s anti-money laundering, counter-terrorism financing, and counter-proliferation financing gaps that were identified during mutual evaluations. These evaluations have led the Philippines to embark on a comprehensive reform agenda.
The decision made by the European Commission shows how much it follows FATF criteria and guidelines. Being a founding member of the FATF, the Commission keeps track of how jurisdictions implement their action plans to remedy the marked weaknesses. This ensures there is uniformity in the global anti-money laundering policies and supports the integrity of the international financial system.
Strengthened Compliance Framework
Along with Barbados, Gibraltar, Senegal, Turkey, Uganda, Jamaica, and the United Arab Emirates, the Philippines became part of the European Commission’s removal list from the high-risk countries list. It appears that these countries reinforced the effectiveness of AML and counter-terrorism financing systems as the Commission noted removal is based on having successfully implemented the technical deficiencies action plans.
The Commission observed that these removals also consider the works of FATF and especially its “Jurisdictions under Increased Monitoring” list. This alignment signifies the commitment of the Philippines to the international standards and maintaining good standing with the global financial community.
New Additions to the Risk List
While celebrating the Philippines’ removal, the European Commission simultaneously added ten new jurisdictions to its high-risk list: Algeria, Angola, Côte d’Ivoire, Kenya, Laos, Lebanon, Monaco, Namibia, Nepal, and Venezuela. This shows that the Commission continues to show its commitment to a robust oversight of global AML and counter-terrorism financing standards.
The Commission outlined specific issues for some of the new jurisdictions. Special Economic Zones in Laos have reporting entities such as banks and casinos that need greater oversight concerning risk-based supervision, including fit and proper controls. For Nepal, the country has been given the responsibility of enforcing various risk-based supervision frameworks across commercial banks, high-risk cooperatives, casinos, precious metals and stones dealers, and real estate.
Importance of Global Standards
The European Commission emphasized that compliance with the FATF standards remains critical to the EU’s commitments, supported by the other side of enforcing global standards. In pursuing this alignment, jurisdictions are assisted in mitigating the risks of money laundering, terrorism, and even the financing of proliferation.
The Philippines’ successful removal from both the FATF grey list and the European Commission’s high-risk jurisdictions list stands as a significant achievement in its ongoing effort to improve its financial regulatory framework and maintain good standing with the international community.
Source: Inside Asian Gaming (IAG)
