The Philippines is officially off the Financial Action Task Force (FATF) Grey List, marking a significant step in strengthening its anti-money laundering (AML) and countering the financing of terrorism (CFT) measures. Meanwhile, Laos and Nepal have been added to the watchlist, highlighting persistent risks in their financial systems.
Key Points:
- The FATF removed the Philippines from its Grey List due to substantial progress in AML/CFT compliance.
- The country was added in 2021 due to concerns about illicit financial flows, particularly through Philippine Offshore Gaming Operators (POGOs), which have since been banned.
- Laos and Nepal have now been placed under increased monitoring due to financial system deficiencies.
- The move is expected to reduce compliance burdens on international money transfers and enhance financial transparency for the Philippines.
- Vietnam remains on the Grey List, while North Korea, Iran, and Myanmar are on the FATF Blacklist.
Short Narrative:
After nearly three years under FATF scrutiny, the Philippines has successfully addressed strategic AML/CFT deficiencies and exited the Grey List. Since its 2021 designation, the country implemented reforms, including banning POGOs due to their ties to financial crimes, human trafficking, and organized crime. FATF confirmed the Philippines had “substantially completed its action plan,” leading to its removal from the list.
Meanwhile, Laos and Nepal are now under heightened FATF surveillance. Laos faces ongoing concerns over risk-based supervision of casinos and special economic zones, while Nepal must improve oversight of high-risk sectors such as real estate, casinos, and financial institutions.
The Philippines’ Anti-Money Laundering Council (AMLC) hailed the FATF decision, emphasizing that it will ease cross-border transactions and boost financial stability. However, FATF warns that continued vigilance is necessary to prevent future compliance setbacks.
Actionable Insight:
FATF’s decision signals improved confidence in the Philippines’ financial system, making the country more attractive for foreign investment. However, firms operating in Southeast Asia should reassess AML risks, particularly in newly grey-listed Laos and Nepal, and prepare for increased scrutiny.
Call for Information:
Are you aware of financial institutions in Laos or Nepal struggling with FATF compliance? Do you have insights into AML loopholes in the region? Contact FinTelegram to expose financial risks and regulatory blind spots.
