- The Washington Times - Thursday, March 13, 2003

SINGAPORE, March 14 (UPI) — The Paris-based Financial Action Task Force has decided not to apply any counter-measures to the Philippines following the republic's amendment to its 2001 Anti-Money Laundering legislation.

The nation will, however, remain on the list of non-cooperative countries and territories until it has implemented effectively its new anti-money laundering legislation.

Earlier this month, Philippine President Gloria Arroyo signed into law a revised anti-money laundering act, which closed loopholes in the country's money laundering law, bringing it in line with standards demanded by the global watchdog. The organization, which was set up in 1989 by major industrialized nations to fight money laundering by militants and criminal groups, had threatened to impose financial sanctions on the country by March 15 following the initial passage in February of a watered-down Anti-Money Laundering Act.

The initial amendment had fallen short of the standards set by the FATF because financial regulators still needed a court order to look into bank accounts except in cases of kidnapping, hijacking and drug trafficking. The new legislation "addressed the main legal deficiencies in the Philippine anti-money laundering regime, which it had previously identified," the FATF said.

The new law includes removing a requirement that government investigators must get a court order before they could look into suspicious bank accounts. It also lowers the threshold for bank accounts balances that can be investigated to $9,260.

FATF President Jochen Sanio noted this was "a significant" success for the FATF and the Philippines in the fight against money laundering.

"Close monitoring of implementation issues will be crucial in determining an appropriate time for the Philippines' removal from the NCCT list," he said.

The FATF will now monitor the situation in the Philippines and will discuss appropriate next steps at its next plenary meeting in Berlin on June 18-20.

Sanctions would have weakened the balance of payments position and slow economic growth by actively deterring foreign portfolio investment, while raising the cost of international financial transactions.

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