Memorandum Circular No. 37




MALACAÑAN PALACE MANILA BY THE PRESIDENT OF THE PHILIPPINES [ MEMORANDUM CIRCULAR NO. 37, October 16, 2023 ] DIRECTING THE URGENT IMPLEMENTATION OF THE NATIONAL ANTI-MONEY LAUNDERING, COUNTER-TERRORISM FINANCING AND COUNTER-PROLIFERATION FINANCING STRATEGY 2023-2027, AND ENJOINING ALL CONCERNED AGENCIES TO FULLY SUPPORT AND ACTIVELY PARTICIPATE IN THE CONDUCT OF MONEY LAUNDERING/TERRORISM FINANCING NATIONAL RISK ASSESSMENT WHEREAS, Section 2 of Republic Act (RA) No. 9160, as amended by RA No. 11521 or the "Anti-Money Laundering Act of 2001," declares it a policy of the State to ensure that the Philippines shall not be used as a money laundering site for the proceeds of any unlawful activity, and that the State, consistent with its foreign policy, shall extend cooperation in transnational investigations and prosecutions of persons involved in money laundering activities wherever committed, as well as in the implementation of targeted financial sanctions related to the financing of the proliferation of weapons of mass destruction, terrorism and financing of terrorism; WHEREAS, Executive Order (EO) No. 68 (s. 2018), as amended by EO No. 33 (s. 2023), established the National Anti-Money Laundering/Counter-Terrorism Financing/Counter Proliferation Financing (AML/CTF/CPF) Coordinating Committee (NACC) to facilitate inter-agency coordination relative to the country's AML/CTF/CPF policies; WHEREAS, in August 2019, the Asia Pacific Group (APG) on Money Laundering concluded the Third Mutual Evaluation of the Philippines, which assessed the levels of technical compliance of Philippine laws, rules and regulations with international AML/CTF standards, and effectiveness of the country's overall AML/CTF system; WHEREAS, in October 2019, the Financial Action Task Force (FATF) affirmed the Third Mutual Evaluation Report (MER) of the Philippines, and placed the Philippines under a twelve-month Observation Period, pursuant to the FATF International Co-operation Review Group (ICRG) process; WHEREAS, in June 2021, the Philippines was included in the FATF list of "Jurisdictions Under Increased Monitoring" or the "Grey List" for its failure to show tangible and positive progress in addressing all key recommended actions in the Third MER; WHEREAS, under EO No. 33, the National AML/CTF/CPF Strategy (NACS) 2023-2027 was adopted for the purpose of enabling the Philippines to address the ICRG Action Plans, ensure that the Philippines exits the FATF Grey List, and improve its AML/CTF/CPF regime; WHEREAS, EO No. 33 provides that the Anti-Money Laundering Council (AMLC) Secretariat shall serve as the Secretariat of the NACC, and shall provide technical and administrative support to the NACC; WHEREAS, as of September 2023, out of eighteen (18) ICRG Action Plans, there are still eight (8) that the Philippines must address to exit the FATF Grey List by January 2024; WHEREAS, the urgent implementation of the NACS 2023-2027, particularly its Strategic Objective 1, will intensify and expedite efforts to address deficiencies identified by the FATF ICRG; WHEREAS, in 2026, the Philippines is expected to undergo another Mutual Evaluation; WHEREAS, under international standards on combating ML/TF, countries are required to identify, assess and understand the money laundering and terrorism financing risks for the country, and are mandated, based on said assessment, to apply a risk-based approach to ensure that measures to prevent or mitigate ML/TF are commensurate with the risks identified; WHEREAS, as a member of the APG, and in compliance with the international standards on combating ML/TF, the Philippines must conduct an ML/TF National Risk Assessment (NRA) to determine the country's risks and vulnerabilities associated with ML/TF; and WHEREAS, Section 17, Article VII of the Constitution vests in the President the power of control over all Executive departments, bureaus and offices, and the mandate to ensure faithful execution of laws; NOW, THEREFORE, the following are hereby ordered: Section 1. Urgent Implementation of NACS 2023-2027. In accordance with their respective mandates, all concerned departments, agencies, bureaus, and instrumentalities of the National Government, including government-owned or -controlled corporations (GOCCs) are directed, and all local government units (LGUs) are encouraged, to immediately and timely formulate and implement relevant strategies, plans and programs to implement NACS 2023-2027, particularly its Strategic Objective No. 1. For this purpose, all Heads of concerned agencies shall: a. Immediately review and assess the respective deliverables of their office under the ICRG action Plans; b. Assign focal person/s tasked to ensure that all deliverables are completed and all targets are achieved by 30 November 2023; and c. Establish a mechanism for monitoring of progress and reporting of completion of each deliverable. The NACC Secretariat is hereby directed to furnish all concerned agencies of the respective deliverables and targets of their offices under the ICRG Action Plans, and such other relevant documents, including the pertinent resolutions of the NACC. The AMLC is hereby directed to submit to the Office of the Executive Secretary, through the Office of the Deputy Executive Secretary for Legal Affairs, a comprehensive report on the status of implementation of NACS 2023-2027, particularly its Strategic Objective 1, on or before 08 December 2023. Section 2. Conduct of NRA. All concerned departments, agencies, bureaus, and instrumentalities of the National Government, including GOCCs, specifically those names in ANNEX A, attached herewith, (hereinafter referred to as the "ML/TF NRA Working Group") are enjoined to extend support and participation in the conduct of ML/TF NRA. The ML/TF NRA Working Group shall have nine (9) subgroups, namely: a. Threat Assessment; b. National Vulnerability; c. Banking Sector Vulnerability; d. Securities Sector Vulnerability; e. Insurance Sector Vulnerability; f. Other Financial Institution's Vulnerability; g. Designated Non-Financial Business and Professions Vulnerability; h. Financial Inclusion Products Risk Assessment; and i. Non-profit Organizations. The AMLC shall serve as the lead agency of the ML/TF NRA Working Group, and shall formulate and issue guidelines as may be necessary for the effective implementation of this Circular. The AMLC may call upon any government department, agency, bureau or office, including GOCCs, and invite LGUs and representatives from the private sector, to provide assistance in attaining its objectives, subject to existing laws, rules and regulations. All Heads of member-agencies of the ML/TF NRA Working Group shall designate their alternates, with ranks not lower than an Assistant Secretary or its equivalent, who have technical knowledge and operational experience on the matter, and who are fully authorized to decide for or on their behalf. Section 3. Funding. The initial funding requirements necessary for the implementation of this Circular shall be charged against the respective appropriations of concerned government agencies and the respective corporate operating budgets of concerned GOCCs, subject to availability thereof and in compliance with relevant budgetary, accounting, and auditing rules and regulations. Thereafter, the funding requirements necessary for the continued implementation of this Order shall be included in the budget proposal of the AMLC, subject to the usual budget preparation process. Section 4. Effectivity. This Circular shall take effect immediately.1aшphi1 DONE, in the City of Manila, this 16th of October, in the year of our Lord, Two Thousand and Twenty-Three. By authority of the President: (SGD.) LUCAS P. BERSAMIN Executive Secretary ANNEX A Financial Intelligence Unit Anti-Money Laundering Council Supervisory Authorities Aurora pacific Economic and Freeport Zone Bangko Sentral ng Pilipinas Cagayan Economic Zone Authority Insurance Commission Philippine Amusement and Gaming Corporation Securities and Exchange Commission Law Enforcement and other relevant government agencies Anti-Terrorism Council Armed Forces of the Philippines Bureau of Customs Bureau of Immigration Bureau of Internal Revenue Cooperative Development Authority Civil Service Commission Department of Environment and Natural Resources Department of Finance Department of Foreign Affairs Department of the Interior and Local Government Department of Justice Department of National Defense Department of Social Welfare and Development Department of Trade and Industry Inter-Agency Council Against Trafficking Intellectual Property Office of the Philippines Intelligence Service Armed Forces of the Philippines Land Registration Authority National Bureau of Investigation National Intelligence Coordinating Agency National Privacy Commission National Security Council Office of the Ombudsman Office of the Solicitor General Presidential Anti-Organized Crime Commission Philippine Amusement and Gaming Corporation Philippine Center on Transnational Crime Philippine Coast Guard Philippine Drug Enforcement Agency Philippine Deposit Insurance Corporation Philippine Ports Authority Philippine National Police - Anti-Cybercrime Group Philippine National Police -Anti-Kidnapping Group Philippine National Police - Aviation Security Group Philippine National Police - Criminal Investigation and Detection Group Philippine National Police - Directorate for Investigation and Detection Management Philippine National Police - Directorate for Intelligence Philippine National Police - Highway Patrol Group Philippine National Police - Intelligence Group Presidential Anti-Organized Crime Commission Professional Regulation Commission - Board of Accountancy Professional Regulation Commission - Board of Real Estate Service Supreme Court - Office of the Court Administrator The Lawphil Project - Arellano Law Foundation