PH now on ‘gray’ list

The determination of the Aquino administration to prevent the Philippines from becoming one of the best places to stash wealth from illegal sources got a big boost last week with the signing into law of two bills aimed at curbing money laundering and terrorist financing.

The twin measures also spared the Philippines from being put on the blacklist by the Paris-based Financial Action Task Force (FATF), the 33-nation, policymaking body formed by developed countries to examine techniques and trends in money laundering and lay down measures to combat it. In fact, the Philippines was upgraded on June 22 from the “dark gray” list to the so-called compliance document or “gray” list, according to Amando Tetangco Jr., chair of the Anti-Money Laundering Council (AMLC) and governor of the Bangko Sentral ng Pilipinas. A “dark gray” listing means a country is not making sufficient progress against money laundering and terrorist financing; a “gray” listing means that it is doing so.

Malacañang believes that the two laws—the Act To Further Strengthen the Anti-Money Laundering Law and the Terrorism Financing Prevention and Suppression Act of 2012—will strengthen the government’s capability to identify and prevent financial transactions related to illegal activities and the undermining of global security. Under the terrorism-financing prevention law, anyone found to have provided, collected or used property or funds to carry out or facilitate the commission of a terrorist act would be punished with long prison terms and up to P1 million in fines. Conspiracy to provide terrorist financing is also included as a crime in the law. Properties or funds found to have been used for terrorist financing or terrorist acts will be subjected to civil forfeiture proceedings. The law likewise mandates the AMLC to investigate any property or funds that are related to the financing of terrorists or acts of terrorism.

The more important amendment to the Anti-Money Laundering Law allows authorities to examine suspicious accounts upon a court order even without notifying the holders or owners of such accounts. Also, only the Court of Appeals is empowered to issue a freeze order on any suspicious monetary instrument or property upon the petition of the AMLC. Under the amendment, the appellate court is required to act on a petition of the AMLC within 24 hours from filing. And while the person being investigated is allowed to file a motion to lift the freeze order, only the Supreme Court can issue a temporary restraining order or injunction on the freeze order. Prior to the amendment, the law was considered toothless because suspected money launderers were given ample time to withdraw all their deposits even before the government could check them. Even the lower courts could issue TROs on the freeze orders.

But the government should not stop at efforts to combat all forms of financial crimes with these amendments to the Anti-Money Laundering Law. It should also push, with the same vigor, similar measures still pending in Congress. For example, there is a bill at the House of Representatives seeking to amend the Foreign Currency Deposit Law by removing the absolute confidentiality of foreign currency deposits. This absolute confidentiality was a fundamental bone of contention in the impeachment trial of then Chief Justice Renato Corona, who was eventually found to have failed to accurately disclose all his assets and was removed from his post. The AMLC had told the House committee on banks and financial intermediaries that the law should be amended to provide exceptions to the provision on confidentiality.

In its decision to upgrade the Philippines, the FATF in fact noted that certain strategic deficiencies remained in the country’s anti-money laundering and anti-financial terrorism measures. It advised the Aquino administration to enact pending legislative amendments to the Anti-Money Laundering Law that, among others, extend the coverage of reporting entities, provide a broader definition of money laundering, and increase the number of predicate crimes to include bribery, malversation of public funds, human trafficking, tax evasion and environmental crimes.

The only problem with these pending amendments is that congressmen and senators—many of them multimillionaires—do not seem very interested in bills that will pry into their wealth or mandate waivers on their bank

accounts.