Philippines surprising turnaround in money laundering law
An abrupt about turn by the Philippines may just help improve relations with the FATF.
In a surprising volte-face, the Philippines House of Representatives yesterday passed measures that it claims meets the demands of the Financial Action Task Force.
First amongst the changes is a reduction in the threshold for cash transaction reporting to PHP500,000 (GBP5,700) from the current level of PHP4 ( a little over GBP45,500) million.
The Act will provide guidance on what is to be regarded as suspicious - it will be where a transaction is out of character for that particular account or for the known financial profile of that customer.
The law will also expressly provide for the Anti Money Laundering Council to be entitled to investigate suspicious transactions regardless of the value - there was an argument that the previous law implied a lower limit on the power.
The FATF meets on 12 February and the Philippines hopes to pass this law through the upper house long before that, in order to try to be removed from the FATF list of non-cooperative jurisdictions.
The current law was passed in a late night sitting the day before a previous deadline.
It may be that the law means that the FATF does not apply "countermeasures" although commentators feel that such is not very likely given that the Philippines laws are a long way ahead of many. But the FATF is squeezed under its undertaking to the IMF not to increase the size of the list. It risks being marginalised and so countries may find it more difficult to come off the list now than when the FATF was able to replace departing countries, so maintaining pressure on those who were not on the list.
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