AMLC aims to comply with FATF action items by October

The Anti-Money Laundering Council (AMLC) is eyeing to address by October the remaining action items set by the Financial Action Task Force (FATF) in order to exit the “gray list” of jurisdictions under increased monitoring for money laundering risks.

“We are hopeful that we will comply with all these action items by October of this year,” AMLC Executive Director Matthew M. David told a Senate budget hearing on Tuesday.

“If we comply with the action items by October this year, by early next year, which is January, there is a big probability of an on-site visit,” he added.

The on-site visit is one of the steps in the FATF’s mutual evaluations, where it assesses the implementation of a country’s measures against anti-money laundering and counter-financing of terrorism (AML/CFT).

After the on-site visit, the assessors will draft a report that will then be presented at the FATF’s next plenary.

The remaining action items that the Philippines must address include “demonstrating that supervisors are using AML/CFT controls to mitigate risks associated with casino junkets.”

It must also address deficiencies that concern “applying cross-border measures to all main sea/airports including detection of false declarations of currency and confiscation action in line with risk; and demonstrating an increase in the prosecution of terrorism financing cases in line with risk.”

“Those are the only remaining action items. If you remember, in June 2021, there were 18 recommended action items imposed by FATF through the joint group. But now, it’s only three,” Mr. David said.

The action item on terrorism financing prosecution will require more filing of cases, he said.

“We need to file more terrorism financing cases until the end of this cycle, which is this month,” he said.

As of the first half of the year, the AMLC has secured 19 freeze orders, 17 bank inquiry orders, and four petitions for civil forfeiture. In addition, 64 complaints have been filed with the Justice department while 12 cases were filed in court.

Mr. David said that the action item on casino junkets will depend mainly on the Philippine Amusement and Gaming Corp. as the AMLC has already turned over the supervision of casinos and junket operators to the gaming regulator.

He said there are around 12 land-based casinos and approximately 40 junket operators.

Meanwhile, the item on cross-border measures will require the cooperation of the Bureau of Customs.

“Actually, the issue there is about our submission of the Customs declaration and it’s because of our e-travel system. Now, that’s up and running,” Customs Commissioner Bienvenido Y. Rubio said.

In its June update, the FATF kept the Philippines on its gray list for a third straight year.

BSP Governor Eli M. Remolona, Jr. earlier said the country could exit the gray list by next year.

ARTIFICIAL INTELLIGENCE

Meanwhile, AMLC said it is also planning to integrate artificial intelligence (AI) in its operations as soon as next year.

“In the AMLC, the AI project is already under development. We’re about to complete it within this year. We already procured suppliers more than a year ago,” Mr. David said.

“It will be completed this year, but it will be operational early next year, provided that we will procure the subscription,” he added.

Under the AMLC’s proposed PHP 346-million budget for 2025, more than PHP 50 million will go to the procurement of the subscription of the AI system.

“Because if you develop an AI, you need subscription also annually. That’s the biggest chunk of our information and communication technologies (ICT) products that we are procuring for next year,” he said.

AMLC plans to use AI tools to process covered transaction reports (CTRs) and suspicious transaction reports (STRs).

“We have big data from the CTRs and STRs. Last year, we received 15 million CTRs and STRs. CTRs are transaction reports from banks and among other covered persons. We have 14,000 covered persons, that’s why there are many transaction reports submitted. How will you manage big data like that without the assistance of the AI?”

Mr. David said AMLC has only around 30 analysts that process the data. “We need the assistance of technology and machine learning,” he added. – Luisa Maria Jacinta C. Jocson, Reporter