* Need to pass relevant laws to improve the Philippines AML/CFT legal framework;

* Effective implementation of a risk based supervision of covered persons;

* To have timely access to beneficial ownership information by Law Enforcement Agencies;   

* Improve the investigation and prosecution of money laundering and terrorism financing cases, aligned with the country's risk profile;

* Improve confiscation of proceeds of crimes at the point of conviction;

* Implementation of cross border cash measures in all international ports;

* Awareness improvement of relevant stakeholders on targeted financial sanctions framework; and

* Implementation of measures to protect non-profit organizations from TF abuse.

* The 2019 Mutual Evaluation Report found inadequate resourcing with respect to development of financial intelligence and money laundering investigations, being that the AMLC was the only designated authority to investigate ML at that time. AMLC was also the main agency which has responsibility to confiscate criminal proceeds through civil forfeiture actions.

To address the issues on investigation resources, the Philippines has coordinated with various LEAs and implemented the Deputized AMLC Financial Investigators (DAFI) framework to serve as force multipliers in the conduct of ML investigations. The purpose of the DAFI program is to enhance the capacity of LEAs in the development of financial intelligence and the conduct of financial investigation, which they can do in parallel with their predicate crime investigations.

The AMLC has likewise increased its manpower complement and implemented innovations relative to financial intelligence analysis. The financial intelligence products are disseminated to LEAs to support their ML and predicate crime investigations.

* In the last NRA, predicate offenses rated high are the following: a) smuggling; b) violations of intellectual property law; c) illegal manufacture and possession of firearms, ammunition and explosives; d) environmental crimes; e) investment fraud and estafa; f) violation of dangerous drugs law; and g) plunder and violations of the anti-graft and corrupt practices act. A 2020 Risk Study also identified Online Sexual Abuse and Exploitation of Children as a high-risk crime.

* While there has been an increase in the number of money laundering investigations and prosecutions in recent years, the numbers remain relatively low particularly in relation to other high-risk crimes. There is a need to sustainably increase the number of ML investigations and prosecutions predicated on these high-risk offenses through strengthening coordination mechanisms among the LEAs, Prosecutors, AMLC, and other relevant agencies.

* Formal and informal international cooperation mechanisms are not fully utilized when transnational elements and foreign proceeds are identified in on-going investigations. There has been a low number of outgoing mutual legal assistance requests. There is also a need to increase investigations and prosecutions of crimes with transnational elements and foreign proceeds, especially among DAFI agencies.

* To strengthen the country's framework for confiscation of proceeds of crimes, the Supreme Court issued the Rules on Criminal Forfeiture in 2021. The Rules also provides for provisional remedies in criminal forfeiture involving money laundering and its predicate crimes. There is a need to further implement the Rules to support seizure and confiscations by LEAs and prosecutors.

Philippine LEAs conduct asset tracing as part of their financial investigations. LEAs and Prosecutors also utilize a number of measures (administrative, civil and criminal) to confiscate proceeds of crime. The number of seizures and confiscations, however, remains relatively low particularly in relation to other high-risk crimes. There is a need to sustainably increase the number of seizures and confiscation actions, including as part of criminal actions.

* In 2021, the Supreme Court also included ML and Forfeiture actions within the jurisdiction of the Special Commercial Courts (SCC). This ensures that SCC judges will enhance their expertise in handling ML and confiscation actions. In addition, the Supreme Court designated additional SCCs, bringing the total to147 SCCs located across various regions.

* The LEAs, Prosecutors, and other relevant LEAs should continuously enhance their knowledge and capacity in order to address the evolving trends of ML, TF, and predicate offenses. This can be done through continuing training programs and strategic research on ML. TF, and crime trends.

* The 2019 MER found that there are low confiscations related to cross border declaration was underpinned by limited coverage of sea/airport entry/exit points and the staffing shortages, may be a contributing factor.

The Bureau of Customs has now implemented cross border declaration measures across all major international sea and airports.

Measures are also in place to enhance the detection and identification of false declarations and confiscations. the BOC should continue implementing these measures to ensure the collection of cross-border declarations, detections of false declarations and institution of confiscation actions, when so warranted.

* The level of TF investigative activities was found to be inconsistent with the Philippines TF risk profile. At the time of the ME, there were no TF prosecutions.

To address this, the Philippines dedicated considerable resources for the TF investigation and prosecution. The DAFI program ensures that LEAs have the capacity and skills to identify and investigate TF. The Department of Justice likewise increased its resources to support TF Prosecutions.

The Supreme Court of the Philippines identified fifteen (15) Regional Trial Courts (RTC) across the region to handle terrorism and counter-terrorism financing cases involving crimes under the Anti-Terrorism Act (RA 11479) and the Terrorism Financing Prevention and Suppression Act (RA 10168). Said courts are "designated to exclusively and speedily hear, try and decide" the cases committed in respective regions.

There should be continuous provision of capacity building activities to enhance and update skills of investigators, including for financial investigation training on different types of TF activity. Capacities of the dedicated prosecutorial and judicial resources should be continuously enhanced.

* While there has been an increase in TF identification and investigation efforts, improvements are still necessary to further increase the numbers in line with the risk profile.

DAFIs/LEAs should increase use of TF identification mechanisms, including but not limited to proactive initiation of financial inquiries, conduct of separate parallel financial investigations and use of various coordination mechanisms. This should include strengthening intelligence-sharing, cooperation, and collaboration with other jurisdictions.

DAFIs/LEAs should likewise increase its TF investigations with particular focus on standalone TF offenses and financing of terror networks as well as TF arising out of counter terrorism actions and investigations.

These identification and investigation actions should translate to prosecution of criminal cases on terrorism financing.

* At the time of the MER, strategic deficiencies were noted on the targeted financial sanctions (TFS) framework on terrorism financing as the proscription process under the Human Security Act (HSA) is not in line with the requirements on UN Security Council Resolution (UNSCR) No. 1373. Due to these deficiencies, the Philippines made limited use of the designation framework to deny funds to and freeze assets of terrorists.

The deficiency in the legal framework has since been addressed with the passage of Republic Act No. 11479, or the Anti-Terrorism Act (ATA). Since then, the Philippine authorities have designated terrorists and terrorist organizations and have frozen funds/assets pursuant to AMLC's sanctions freeze order. Philippine authorities should continue using the designation framework to effectively deny funds to designated persons and entities.

* The Philippines continuously assesses terrorism financing risks associated with non-profit organizations. In the 2018 risk study, a number of unregistered organizations were identified with potential TF risk. In the 2021 study conducted by the SEC, risks were again assessed, and mitigation measures were implemented.

The SEC, together with other regulations, has been conducting an aggressive information campaign to educate NPOs on the abuse of NPOs for TF purposes and to encourage registration with the SEC. The SEC likewise conducts risk based supervision to protect the NPO sector and promote legitimate activity. SEC and other competent authorities should continue taking appropriate measures with respect to the NPO sector, including measures to address unregistered organizations, without disrupting legitimate NPO activities.

a. a designated person under UNSCR 1718 and its subsequent resolutions;

b. a designated person under UNSCR 2231 and its subsequent resolutions;

c. any entity owned or controlled by a designated person;

d. any individual or entity who acts on behalf of or under the direction of designated person; or  

e. any person in, or who in a national of, the Democratic People's Republic of Korea.

a. a designated person under UNSCR 1718 and its subsequent resolutions;

b. a designated person under UNSCR 2231 and its subsequent resolutions;

c. any entity owned or controlled by a designated person;

d. any individual or entity who acts on behalf of or under the direction of a designated person; or

e. any person in, or who is a national of, the Democratic People's Republic of Korea.

* In the last NRA, it was noted that not all competent authorities have access to beneficial ownership information held by bank because of the operation of bank secrecy laws.

To address the issue, the SEC and the AMLC should continue to enhance its mechanisms to ensure that competent authorities, including the LEAs, are able to access beneficial ownership information in a timely manner.

* There is a need for the Philippines to enhance and streamline LEAs access to BO information, through the AMLC's mechanisms, including by improving the timeliness and accuracy of such access and enforce BO disclosure obligations to obtain a higher level of timely submission of the GIS through the application of proportional and dissuasive sanctions to non-compliant corporations.

To address this, the SEC should endeavor to increase the number of LEAs and other Competent Authorities with direct access to BO information through the signing of the necessary MOAs/Data Sharing Agreements.

The SEC should continue its efforts, by issuing aggressive policies, in promoting its programs, through continuous outreach actions, related to the enrollment of legal persons on its eFAST platform to increase the number of legal persons that comply with BO disclosure.

* The SEC should continue to take appropriate enforcement actions against legal persons that fail to comply with BO disclosing obligations including the application of proportionate and dissuasive sanctions and the revision of the penalties applicable to delinquent corporations.

* DNFBP Supervisors have made enhancements to their risk-based supervision framework. Supervision is at varying stages of information. Supervision plan should ensure that higher risk covered persons are prioritized.

* For DNFBPs, other than casinos, registration with the AMLC is currently low, with the universe of DNFBPs that should be covered still uncertain. AMLC should implement a strategy to identify DNFBPs to be registered. This should include outreach and possible sanctioning for non-compliance. Concurrently, AMLC should progress its DNFBP examination and enforcement measures, prioritizing higher risk DNFBPs, with a focus on their implementation of AML.CFT obligations, particularly their reporting obligations.

* For casinos, PAGCOR should continue implementation of risk-based supervision, including conduct of examinations and enforcement measures, prioritizing higher risk casinos and sub-sectors. Offshore gaming operators (OGOs) and their service providers (SPs) were recently included under the AMLC and were considered a high-risk sector.

* CEZA and APECO recently adopted their own risk-based policy framework. With respect to APECO, while it has no licenses with authority to operate, it is ready to implement its framework once operations are allowed. With respect to CEZA, it has disseminated questionnaires to their supervised casinos to ensure adequate risk identification of individual casinos to guide its supervision plan.

* There were concerns regarding casino outsourcing of customer due diligence (CDD) obligations to junket operators, given the major risks posed by junkets. PAGCOR has issued new regulations on fit and proper requirements for junket operators. Examinations conducted by PAGCOR should determine and ensure that CDD requirements on junket participant are conducted by the casinos and that adequate AML.CFT risk mitigation measures are implemented.

* Money service businesses (MSBs) have undergone an extensive re-registration process. There were challenges in identifying and sanctioning unregistered MSBs. The BSP has instituted several measures to identify these unregistered MSBs. These measures should be continuously implemented to ensure protection of the sector and mitigation of risks.

* Strategic deficiencies in the TFS legal framework were addressed with the passage of the ATA providing for a UNSCR 1373 designation framework, and Republic Act 11521, or the 2021 Amendments to the AMLA, providing for a TFS framework on proliferation financing under UNSCR 1781 and 2231.

The AMLC has issued the necessary regulations to guide covered persons in their implementation of TFS TF and PF obligations. Supervisors should ensure that their supervised sectors understand their TFS obligations. Likewise, supervisors should check that covered persons are implementing their TFS obligations.

a. Expansion of the definition of the crime of terrorism;

b. Criminal provisions in relation to foreign terrorist fighters;

c. Explanation of investigative powers of competent authorities for terrorism investigations;

d. Designation of terrorist individual, groups of persons, organizations or association;

e. Proscription of terrorist organizations, association, or group of persons;

f. Authority of the AMLC to investigate, inquire and examine bank accounts; and to issue freeze order;

g. Expanded composition of the Anti-Terrorism Council, which now includes the AMLC Secretariat Executive Director.

* The STMA regulates financing of strategic goods only under the provision of "related services". There is a need for clearer guidelines to regulate the financing aspect.

* To effectively regulate entities engaged in manufacturing, exporting and importing of strategic goods, there is a need to create a database and determine the level of risk of these entities.

* The increase of investigative and prosecutorial resources should be complemented with continuous capacity building to ensure that dedicated LEAs and prosecutors are able to adequately conduct ML/TF investigations, prosecutions and confiscations.

* The designation of additional Special Commercial Courts and of Anti-Terrorism/Terrorism Financing Courts is a welcome development. Judges and prosecutors assigned in these courts should undergo the necessary trainings to enhance their expertise.

* Timely access and accuracy of beneficial ownership information can contribute to investigations by LEAs. There is a need to continue the aggressive information campaign for legal persons to submit their BO declaration forms as part of the General Information Sheet. The campaign should likewise inform legal persons on sanctions that can be imposed for failure to submit the BO declaration form. Awareness of LEAs on how to access BO information should also be enhanced.

* The registration of other DNFBPs remains a challenge. There is a need to conduct an information campaign to identify DNFBPs and enforce registration requirements. Likewise, for registered DNFBPs, there is a need to continue trainings to promote implementation and understanding of their AML/CFT obligations and risks.

* Risk studies, strategic analysis, and typologies of the AMLC assists covered persons in identifying and reporting suspicious transactions.

* The use of Public Private Partnership mechanisms should be maximized in the field of exchange of studies, typology developments, capacity building activities, and awareness programs.

a) Provide overall policy and strategic direction and oversee the implementation of the NACS; 

b) Coordinate the development and implementation of the AML/CFT/CPF policies and activities to ensure consistency with the NACS, relevant to AML/CFT/CPF laws, and international AML/CFT/CPF standards;

c) Recommend to relevant government agencies policy and/or operational actions, consistent with the strategic objectives of the NACS, to ensure a multi-agency national response to key AML/CFT/CPF risks;

d) Ensure that the roles and responsibilities of relevant government agencues as stated in the NACS are efficiently and effectively carried out;

e) Invite other government agencies and instrumentalities to be part of the NACC or any of its sub-committees, as may be necessary;

f) Formulate and adopt operational guidelines and rules of procedure for the implementation of a national AML/CFT/CPF strategy, and as may be necessary to carry out its functions and duties;

g) Call upon any relevant agency, office, or instrumentality to provide assistance, as may be necessary;

h) Convene and consult relevant AML/CFT/CPF public and private stakeholders on operational and policy issues that may have implications on the implementation and effectiveness of the NACS;

i) Facilitate the periodic conduct of the money laundering and terrorist financing risk assessment and recommend action plans, which may be include in the NACS, to address the risks identified;

j) Evaluate the effectiveness of the NACS in light of the evolving ML/TF risks and compliance with international AML/CFT/CPF standards;

k) Establish and maintain coordination with technical assistance providers to assist relevant government agencies in the implementation of action plans provided in the NACS; and

l) Promote activities to spread awareness of the NACS and identified high ML/TF/PF risk areas.

a) The Financial Intelligence, Law Enforcement and Prosecution sub-committee (FILEPSC) shall be primarily responsible for the implementation and monitoring of action plans under Strategic Objective 1 (Addressing Deficiencies in a Timely Manner), Strategic Objective 2 (Money Laundering Investigation, Prosecutions, and Confiscations), and Strategic Objective 5 (Transparency of Beneficial Ownership Information). The FILEPSC shall likewise provide support and coordinate efforts in the implementation of Strategic Objective 7 (AML/CFT Awareness).

b) The Supervision of Financial Institutions Sub-Committee (SFISC) shall be primarily responsible for the implementation of the relevant action plans under Strategic Objective 1 (Addressing Deficiencies in a Timely Manner), Strategic Objective 6 (Supervision of Financial Institution and Designated Non-Financial Businesses and Professions). The SFISC shall likewise provide support and coordinate efforts in the implementation of Strategic Objective 3 (Terrorism Financing), Strategic Objective 4 (Proliferation Financing), Strategic Objective 5 (Transparency of Beneficial Ownership Information), and Strategic Objective 7 (AML/CFT Awareness).

c) The Supervision of Designated Non-Financial Businesses and Professions Sub-Committee (SDSC) shall be primarily responsible for the implementation of the relevant action plans under Strategic Objective 1 (Addressing Deficiencies in a Timely Manner), Strategic Objective 6 (Supervision of Financial Institution and Designated Non-Financial Businesses and Professions). The SDSC shall likewise provide support and coordinate efforts in the implementation of Strategic Objective 3 (Terrorism Financing), Strategic Objective 4 (Proliferation Financing), Strategic Objective 5 (Transparency of Beneficial Ownership Infomation), and Strategic Objective 7 (AML/CFT Awareness).

d) The Terrorism Financing Sub-Committee (TFSC) shall be primarily responsible for the implementation of the action plans under Strategic Objective 1 (Addressing Deficiencies in a Timely Manner), and Strategic Objective 3 (Terrorism Financing). The TFSC shall likewise provide support and coordinate efforts in the implementation of Strategic Objective 7 (AML/CFT Awareness).

e) The proliferation Financing Sub-Committee (PFSC) shall be primarily responsible for the implementation of the action plans under Strategic Objective 1 (Addressing Deficiencies in a Timely Manner), and Strategic Objective 4 (Proliferation Financing). The PFSC shall likewise provide support and coordinate efforts in the implementation of Strategic Objective 7 (AML/CFT Awareness).

f) The AML/CFT Awareness Sub-Committee (ACASC) shall be primarily responsible for the implementation of the action plans under Strategic Objective 7 (AML/CFT Awareness). The ACASC shall likewise provide support and coordinate efforts in the implementation of Strategic Objective 1 (Addressing Deficiencies in a Timely Manner).