The Department of Trade and Industry in the Philippines fears that exporters and importers in the country may be forced to pay cash for international transactions as a result of the delay in implementing anti-money laundering legislation.
The Trade Secretary for the Philippines, Manuel Roxas II warned that US banks which have correspondent relationships with Filipino banks will probably follow the lead of the First Union Bank of Delaware, which announced recently that it would discontinue all correspondent banking arrangements with institutions in countries which failed to act before the September 30th deadline put in place by the FATF.
Roxas admitted recently that the DTI has not yet developed a contingency plan for the disarray that is sure to follow in the event that Filipino importers and exporters are obliged to pay cash for raw materials and finished products, rather than utilising bank to bank transactions. However, it seems likely that the worst case scenario will come to pass for the country's import/export industry, as Congress is currently in recess, and will be unable to pass the anti-money laundering bill until at least October 15th, over two weeks after the FATF deadline.
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