Conventus Act: In his National Strategy to Combat Money Laundering, Terrorist Financing (CTF), and Proliferation Financing (NACS) 2023-2027, Philippine President Ferdinand R. Marcos, Jr. takes aim at the country’s AML/CFT regime. Can you tell us more about this?
SyCipLaw: The adoption of the National Anti-Money Laundering (“AML”), Terrorist Financing (“CTF”) and Anti-Proliferation Financing (“CPF”) Strategy 2023-2027 (“NACS 2023-2027”) is a comprehensive strategy for the Philippines’ AML/CTF/CPF regime and was driven through multiple factors.
First, in 2019, the Financial Action Task Force (“FATF”), an intergovernmental framework that serves as “global oversight against money laundering and terrorist financing,” affirmed the Third Mutual Evaluation Report (“MER”), which placed the Philippines for a twelve-month period, in accordance with the FATF’s International Cooperation Review Group (“ICRG”) process.
Secondly, in 2021, the Philippines was placed on the FATF “Gray List” or “Jurisdictions under Enhanced Surveillance” list due to its failure to show tangible and positive progress in the implementation of all key moves in the Third REM.
Third, with the expiry of the 2018-2022 NACS, there was a desire to adopt an updated strategy and improve the country’s AML/CFT/CPF regime. As such, the President followed the NACS 2023-2027 with the aim of enabling the Philippines to put the ICRG action plans into effect, ensure that the Philippines leaves the FATF grey list, and improve the country’s AML/CFT/CPF regime. The NACS 2023-2027 aims for a “one-nation approach”, recognising the need for a coordinated and collaborative strategy to address risks, suitable-type shortcomings and the country’s AML/CFT system.
According to the Anti-Money Laundering Council (“AMLC”), the 2023-2027 NACS “corrects known strategic deficiencies in foreign assessments, ensuring compliance with global standards. “Specifically, the NACS 2023-2027 identifies seven “strategic objectives”, with a corresponding action plan, to address the hazards and shortcomings of the Philippines’ AML/CFT systems. The strategic objectives are:
In this regard, the Office of the President issued Circular No. 37, Series of 2023, directing all applicable departments, agencies, offices, and tools of the national government, aggregating government-owned or controlled corporations and local government units, to formulate in a timely manner and put in place plans and systems to put into effect the 2023-2027 SNAS and strategic objectives.
« (…) There is also currently a separation between the Subcommittee on Proliferation Financing and the former Subcommittee on Proliferation Financing and Counter-Terrorism. Such a delimitation, according to the AMLC, “recognizes the unique demanding situations posed by proliferation financing” and “demonstrates a nuanced attitude toward the comprehensive fight against monetary crimes. “
Conventus Law: President Marcos affirms that the 2023-2027 SCNA will have this purpose together with the reorganized National AML/CFT Coordination Committee. As a result of its expanded functions, the Committee has been renamed the National Coordination Committee for Combating Money Laundering/Financing of Terrorism/Proliferation Financing (NACC). What effects will this have on the ground?
SyCipLaw: According to AMLC, the restructuring of the National AML/CFT Coordination Committee into the National Anti-Money Laundering/Countering the Financing of Terrorism/Proliferation Financing (“NACC”) Coordinating Committee demonstrates a shift in the number of people involved in countering proliferation financing. There is now also a separation between the Subcommittee on Proliferation Financing and the former Subcommittee on Counterterrorism Financing and Proliferation Financing. Such a delimitation, according to the AMLC, “recognizes the unique demanding situations posed by proliferation financing. “” and “demonstrates a nuanced technique for comprehensively combating monetary crime. “
Conventus Law: Despite making progress in critical areas, the country remained on the Financial Action Task Force’s (FATF) “grey list” after its June 2023 meeting. What steps are underway?
SyCipLaw: According to the AMLC, on January 2, 2024, the President convened an assembly of all applicable agencies and asked them to “accelerate efforts to meet the targets set through the FATF this year. “The NACC also holds regular assemblies to monitor each agency’s progress that opposes its stated goals. In addition, discussions are underway on other methods to implement the action plans more well and efficiently. The AMLC explains that “the Philippines will continue to work to demonstrate significant improvement in its fight against cash laundering. and countering the terrorist financing regime by expanding risk-based supervision of designated non-financial enterprises and professions (“DNFBPs”), mitigating related risks. with casinos, improving and streamlining law enforcement agencies’ access to favorable proprietary data and expanding prosecutions for money laundering and terrorist financing.
“According to the AMLC, it may take some time to publish and implement new regulations and covered persons are urged to proactively check the FATF recommendations and the latest developments. This will allow policyholders to anticipate needs that may arise over long periods of time. enforce regulations. “
Conventus Law: What is the country doing to get off the “grey list”?
SyCipLaw: The FATC ICRG has provided eighteen elements of the action plan that the Philippines will have to put in place within a certain time frame in order to get off the grey list. All ICRG action plans should be evaluated as if they had been “widely implemented”. “forced” to remove the Philippines from the grey list. The elements of the ICRG action plan broadly cover the following areas:
Specifically, according to the AMLC, the following measures will need to be implemented without delay to build the option for the Philippines to leave the FATF grey list:
The AMLC, the Philippine Amusement and Gaming Corporation (“PAGCOR”) and the Cagayan Economic Zone Authority will have to continue to conduct risk-based monitoring and compliance testing of DNFBPs, as well as implement “dissuasive and proportionate compliance measures. “as opposed to companies that don’t comply. EPNFD. In addition, PAGCOR continues to implement risk-based supervision of the restructured and consolidated Internet gaming licensee sector [formerly the Philippines’ offshore gaming operator sector], to ensure that the new regulatory framework prevents ownership or control by criminals.
PAGCOR deserves the implementation of AML/CFT controls in the junket sector. It is vital that casinos do their due diligence on junket operators and individual junket players, and file suspicious transaction reports, if warranted. Failure by casinos to comply will result in appropriate penalties.
Companies under the supervision of the Securities and Exchange Commission (“SEC”) will have to continue to submit accurate, and up-to-date favorable ownership data in accordance with SEC regulations. In addition, law enforcement agencies would possibly request favorable ownership data from the SEC to their currency investigations.
Relevant law enforcement agencies will have to deal with the growing number of money laundering cases filed with the Department of Justice (“DOJ”) and the courts. According to the AMLC, court cases “should be similar to a variety of high-risk underlying crimes. “such as corruption, smuggling, environmental crimes, infringement of intellectual property, etc. “
Relevant law enforcement governments continue to prioritize terrorist financing prosecutions and demonstrate that terrorist financing cases brought before the DOJ and the courts result in successful prosecutions.
In all foreign airports in operation, the currency and baggage declaration bureaucracy has already been incorporated into the eTravel system. In this regard, the Bureau of Customs (“BOC”) also deserves to continue implementing cross-border declaration measures at all foreign seaports. . The OTO also deserves to focus on expanding the detection of misrepresentations and confiscations.
Conventus Act: AML/CFT regulations are being revamped and expanded, so that regulated corporations stay up-to-date with the latest developments. What regulations do you expect to be replaced soon?
SyCipLaw: The AMLC has initiated the procedure to amend the Implementing Rules and Regulations (“IRR”) of 2018 Republic Act No. 9160, also known as the Anti-Money Laundering Act of 2001, as amended, and the RA 2012 IRR No. 10168, also known as the Prevention and Suppression of the Financing of Terrorism Act of 2012, in preparation for the 2026 Mutual Evaluation. The amendments aim to address the technical needs of the FATF and clarify certain policies and operational issues. They aim to address the technical and operational shortcomings of the AML/CFT framework known at EMN 2019.
The AMLC is also conducting a review and revision of the 2021 AMLC Registration and Reporting Guidelines, to address the recommendations of the MER. This revised edition is expected to be implemented within a year.
Finally, progress and breakthroughs are expected in the AML/CFT framework as a whole, in preparation for the FATF mutual evaluation of the Philippines in 2026.
Conventus Law: New regulations will most likely be imposed in spaces that in the past were unregulated or where enforcement was minimal. To ensure organizations can manage their operational threats, how do they revamp their enterprise-wide threat testing?
SyCipLaw: According to AMLC, it may take some time to publish and implement new regulations and covered individuals are urged to proactively check the FATF’s recommendations and latest developments. This will allow policyholders to anticipate needs that might arise. imposed through long-term regulations. In addition, AMLC recommends that organizations adopt “a reactive and proactive technique for conducting and/or updating their Enterprise Risk Assessments (IRAs). “
Specifically, organizations would possibly incorporate the effects of the upcoming National Risk Assessment (“NRA”), a self-assessment conducted through the Philippine government that employs the Risk Assessment Tool, developed and provided through the World Bank, as the basis for its threat assessment. . frame. According to AMLC, “By incorporating the lessons learned from the effects of the upcoming NRA into their threat assessment framework, organizations will be able to align it more strongly with nationally known threats and vulnerabilities to address operational threats that would potentially be achieved through AMLC changes in the AML/CFT landscape.
In addition, since AMLC conducts on- and off-site reviews and reviews of covered persons, adding similar gap identification to threat assessments, organizations deserve to review and implement AMLC’s recommendations after those reviews. Organizations may also consider compliance with the provisions of the AMLA TIR when developing their Prevention of Money Laundering and Terrorist Financing (“MTPP”) program. Additionally, as the AMLC advises, organizations may need to consider conducting a comprehensive review. of their existing threat assessment frameworks, as well as engage in “comprehensive due diligence processes, taking into account points such as, but not limited to, visitor profiles and transaction volumes, to assess, as appropriate, their exposure to cash laundering and terrorist financing. “threats. “
« (…) It is mandatory to streamline processes through automation and non-mandatory steps to decrease the possibility of errors. Thus, the AMLC states that “through proactive identity and saving from money laundering attempts, adapting to regulatory changes, streamlining AML processes, and implementing continuous improvements, the AMLC can stumble and prevent monetary crimes. “
Conventus Law: Staying ahead of regulatory and monetary adjustments against crime requires proactive threat management. What do you think about this?
SyCipLaw: It’s true that a proactive technique for threat control is to anticipate changes in regulation and monetary crimes. According to AMLC, this “proactive technique involves leveraging data, information, and findings from investigations and reports to find patterns of suspicious activity. “
AMLC explains that “the key to effective anti-money laundering compliance lies in proactively identifying and mitigating potential threats and issues before they escalate. “In addition, “scenario planning” will help agencies anticipate new criminal methods, allowing for “preventative changes in controls. “”On AMLC’s side, a proactive technique means implementing consistent updates to AML frameworks. This would allow for “fine-tuning internal controls, threat control, and [customer due diligence] procedures, thereby ensuring consistent compliance with conversion regulations. “In addition, it is mandatory to streamline processes through automation and non-mandatory steps to reduce the chance of errors. Therefore, the AMLC states that “through proactive identity and avoiding money laundering attempts, adapting to regulatory changes, streamlining AML processes, and implementing continuous improvements. “, the AMLC may well stumble and save you from monetary crimes. “
For organizations, a proactive technique can mean frequently monitoring regulatory developments, conducting normal and consistent threat testing in collaboration with the appropriate government agencies, implementing physically powerful compliance procedures, and selling a culture of compliance. By waiting for and addressing potential threats, organizations can mitigate threats. threats of regulatory violations and monetary crimes and accept it as true with stakeholders.
Patricia B. Paz-Jacoba is a wife and a member of the firm’s practice teams in litigation and arbitration, tax, and intellectual property.
He has extensive experience in resolving disputes for clients operating in the highly regulated commodity, water, energy, mining, environmental protection, land use plans and telecommunications sectors, as well as domestic and foreign arbitrations, both institutional and ad hoc, and in judicial proceedings in arbitration matters.
He also has experience in complex advertising litigation, internal and shareholder disputes, investigations and prosecutions of white collar crimes, fraud and defamation, family law, physical care litigation, intellectual asset control, and tax litigation.
Professional experience
Ms. Paz-Jacoba has represented clients at all levels of the Philippine judicial system, including the Court of Appeals for Taxation (Tax Court) and the Sandiganbayan (Court of Registration Offices), in cases before domestic and foreign arbitral tribunals, as well as in proceedings before administrative agencies.
He makes contributions to many of the firm’s high-value files. Their portfolio includes:
She is an accredited arbitrator of the Philippine International Center for Dispute Resolution and practices ADR in arbitration through the Philippine Department of Justice – Office for Alternative Dispute Resolution.
He is a member of the Philippine Institute of Arbitrators and the Intellectual Property Association of the Philippines, Inc.
Ms. Paz-Jacoba has been named a Next Generation Attorney and Rising Star through Legal 500 Asia Pacific. She was also shortlisted for inclusion in the inaugural Legal 500 – Southeast Asia Region Arbitration Powerlist list, and is shortlisted as “Lawyer of the Year”. (Litigation)” at the 2023 Legal 500 Southeast Asia Awards.
Admission to the Bar Association
2010, Philippines
Education
UP Diliman (BA, laude, 2005; J. D. , 2009)
Publications
Ms. Paz-Jacoba has authored or co-authored several publications, including the Philippine Bankruptcies of “The Legal 500: International Arbitration Comparative Guide” in 2022 and the “CMS Guide on the Recognition and Enforcement of Foreign Judgments and Awards (Southeast Asia Edition). “)” in 2021; Philippines bankruptcies for the World Bank’s flagship publications “Doing Business” from 2016 to 2020; “Foreign Judgment Enforcement Guide” for the Multilaw Litigation Practice Group (LPG) in 2019; ” for the World Bank’s “2016 Government Procurement Benchmarking Project”; ” Concerns Similar to the Complaint Mechanism” for the Review of International Financial Law in 2015; and the Philippine bankruptcy of Juris Publishing, Inc. ” International Product Liability” in 2011.
Professional activities
Philippine Institute of Arbitrators U. P. Circle of Women Lawyers Integrated Bar Association of the Philippines – Quezon City
Ramon I. Rocha IV is a member of the firm’s Litigation and Arbitration Department. Rocha has significant experience in civil and criminal litigation, as well as advertising arbitration.
Mr. Rocha represents before administrative and quasi-judicial bodies such as the Office of Fair Trade Enforcement of the Department of Trade and Industry, the Energy Regulatory Commission, the Audit Commission, and the Competition Commission of the Philippines.
Mr. Rocha also provides corporate secretarial services and advises clients on general regulatory requirements.
Mr. Rocha organized educational sessions for monitoring and staffing clients regarding potential morning check-ins from various administrative agencies. He also participated in a virtual mock arbitration organised through the Young Members Group of the Chartered Institute of Arbitrators (East Asia Branch).
Admission to the Bar Association
2016, Philippines
Education
University of the Philippines, Diliman (J. D. , BA)
Publications
Professional activities
Member of the Integrated Bar Association of the Philippines, Makati Section
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