Dirty money watchdog warns vs. global repercussions sans anti-terrorism law

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Metro Manila (CNN Philippines, June 14) – The country may face stringent protocols in dealing with the international financial community that may affect business, transactions and even the country’s creditworthiness if it fails to pass the Anti-Terrorism Bill, a government watchdog cautioned at the weekend.

The Anti-Money Laundering Council (AMLC) said Saturday the measure must be enacted soon to prevent the country’s classification in the so-called gray list of the Paris-based global dirty money watchdog Financial Action Task Force (FATF).

The FATF carries out increased monitoring of countries on the gray list, including an assessment on the progress to achieve goals against money laundering. While gray-list classification is not as negative as the blacklist, countries on the list may still face sanctions from institutions like the International Monetary Fund and the World Bank and experience adverse effects on trade.

“If any or all of the proposed amendments are not passed and not implemented within the observation period, the country will be included in the FATF ICRG gray list, which will publicly identify the Philippines as a risk to the international financial system for having strategic deficiencies in its [anti-money laundering and counter-terrorism financing] framework,” the AMLC said in a statement.

The ICRG refers to the International Cooperation Review Group that looks into what it calls “high-risk jurisdictions” and recommends actions to address such risks.

"The Philippines’ inclusion in the gray list will result to an additional layer of scrutiny from regulators and financial institutions, thereby increasing the cost of doing business; delaying the processing of transactions; and blocking the country’s road to an ‘A’ credit rating," the AMLC said. 

The AMLC pointed out "non-negotiable provisions" in the Anti-Terrorism Bill that would make make the country compliant with international standards.

In particular, these are Section 3 (b) on the definition of a designated person, Section 11 (a, b, and c) on the unlawful acts of foreign terrorists, Section 25 on the designation of terrorist individuals, groups of persons, organizations, or associations, and Section 34 on the AMLC’s authority to investigate, inquire into, and examine bank deposits, Section 35 on the AMLC’s authority to freeze.

In addition, these items should be retained: Section 37 on safe harbor for any person acting on good faith when implementing targeted financial sanctions, and Section 45 (i) on the function of the Anti-Terrorism Council to take action on relevant resolutions issued by the United Nations Security Council.

The AMLC said FATF pointed out shortcomings in the country’s laws to counter money laundering and terrorism. It added the global watchdog’s recommendations were earlier proposed as amendments to the Human Security Act, and now incorporated in the Anti-Terrorism Bill that is pending enactment.

The council said the country must prove its resolve to stamp out dirty money deals that, among others, fund terrorist acts, beyond enacting stricter laws as the global financial community will assess strict compliance with international standards.

“The country must also demonstrate effective implementation of these amendments before the observation period ends in February 2021,” the AMLC said. “With the early passage of the (Anti-Terrorism Bill), the Philippines will be given a very good opportunity to implement the same and demonstrate progress in fulfilling our international commitments.”

The controversial bill, which allows warrantless arrest and detention of suspected terrorists for up to 24 days, is up for the President’s signature. President Rodrigo Duterte has 30 days from June 9 to either sign or veto the bill before it lapses into law. The certified measure will repeal the Human Security Act of 2007.

The Department of Justice is expected to submit to Malacañang the results of its review on the bill by June 17.

Meanwhile, thousands of Filipinos have protested against the measure, citing amendments that may be prone to human rights violations.