Philippines waits on sidelines of blacklist debate

PUBLISHED : Wednesday, 30 January, 2002, 12:00am
UPDATED : Wednesday, 30 January, 2002, 12:00am

Philippine lobbyists have been barred by a money-laundering watchdog from a debate on their attempt to have the Philippines removed from the Financial Action Task Force (FATF) blacklist.

The debate will be held in private this week after the main session of the FATF Hong Kong summit on money laundering formally gets under way today.

Senator Francis Pangilinan, chairman of the committee that helped draft an anti-money-laundering law passed by Philippine legislators in September last year, was in Hong Kong earlier this week to urge a FATF working group to remove the nation from its list of non-complying countries and territories.

Along with 15 other blacklisted countries - including Indonesia and Russia - the Philippines faces counter-measures that require banks in FATF member countries to investigate and report in detail on capital flows in and out of the country.

Harsher measures were threatened if FATF judged the new anti-money-laundering provisions still inadequate after ordering the Philippines to tighten the new law.

Senator Pangilinan said yesterday: 'I spoke with some of the members and asked if we could sit in as observers when the plenary debated our submission.

'I believed it would be a matter of basic fairness. They are saying we have to make adjustments to our anti-money-laundering law and a change of policy, but if we are excluded from the debate how do we get a sense of the situation?'

He was told only members could attend the debate.

On Monday, Senator Pangilinan presented an argument to a closed-door meeting of the FATF working group that although the new law was judged inadequate by FATF, other regulations in the Philippines covered any remaining loopholes.

Powerful political interests have opposed wide amendments to the reporting and disclosure of banking transactions, defending a culture of secrecy critics say makes the Philippines a haven for money launderers.

The country is reputed to be second only to the Russian financial system in the amount of money laundered.

FATF, which is headed by Hong Kong representative Clarie Lo Ku Ka-lee, the SAR's Commissioner for Narcotics, is meeting for the first time since it adopted a plan to combat terrorist financing following the September 11 attacks on the United States.

Charged initially with combating the laundering of mainly drug money, the organisation has taken on the role of introducing measures aimed at choking off finance to groups defined as terrorists.

On the agenda of the 29-country organisation will be a special forum on combating terrorist financing.

All the deliberations will be private and the first light to be shed on the proceedings will come at a press conference on Friday.