Philippines Plans to Remove Itself from the Money Laundering Grey List
The Philippines continues to be on the FATF's grey list, indicating that it lacks strong measures to prevent money laundering and terrorist financing. FATF, established by the G7, is an organization aimed at minimizing the global flow of illicit money.
In 2021, FATF added the Philippines to the grey list. Since then, the country's government has committed to collaborating with FATF to enhance its anti-money laundering defenses.
The numerous casinos in the Philippines have been partially blamed for FATF considering the Southeast Asian nation vulnerable to criminal activity due to inadequate banking security protocols. Last October, Philippine President Ferdinand "Bongbong" Marcos Jr. instructed PAGCOR, which regulates and operates casinos in the country, to create regulations ensuring casinos maintain measures to prevent money laundering.
PAGCOR, one of the 44 government agencies Marcos instructed to take necessary steps to remove the Philippines from the grey list, is taking action. Tengco, PAGCOR's Chairman and CEO, announced Thursday.
Tengco has placed Eisma, PAGCOR's new President and COO, in charge of overseeing the gaming regulator's attempts to develop stringent protocols against money laundering. Eisma, a lawyer, was promoted to PAGCOR's leadership position in April after serving on the Development Bank of the Philippines' board of directors. She is the first female President and COO of PAGCOR.
Tengco mentions that PAGCOR's focus on money laundering at the moment is on risk-based supervision and disrupting the operations of junket groups. The Philippines has seen a surge in junket firms after Macau clamped down on their activities due to the COVID-19 pandemic.
These measures, according to Tengco, will speed up the country's removal from the FATF grey list.
Junkets cater to wealthy gamblers in Asia, transporting them via private jets to casino hubs like Manila's Entertainment City. In these private high-roller rooms, the VIPs often receive credit to match their entire luxury trip costs. Some officials, including China's Xi Jinping, believe junkets facilitate the illicit flow of money.
Countries on the FATF grey list include Congo, Haiti, Nigeria, South Africa, Syria, and Vietnam. Only three nations are on the "black list" or "high-risk jurisdictions" where governments are advised not to do business - North Korea, Iran, and Myanmar (Burma).
Philippines' Improvements Impress FATF
FATF has been pleased with the Philippines' early efforts to improve its anti-money laundering and counter-terrorist financing efforts. In February, the FATF said the "Philippines has made progress towards improving" these regulations.
Among the four steps the Philippines should continue to work on is "AML/CFT controls to mitigate risks associated with casino junkets."
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