PH not a money-laundering hub - AMLC | Global News

PH not a money-laundering hub – AMLC

By: - Reporter / @bendeveraINQ
/ 09:30 AM March 23, 2016

MANILA — Despite the laundering through the Philippine financial system of $81 million earlier stolen by Chinese computer hackers from the account of the Bangladeshi central bank, the country is not a hotspot for money laundering, Julia C. Bacay-Abad, executive director of the Anti-Money Laundering Council has said.

Abad called for further tightening of rules against money laundering by including casinos as well as real estate brokers and dealers under the the anti-money laundering act (AMLA).


“The Philippines is not the single country where money laundering could happen. We’re not a haven for money laundering,” Bacay-Abad told reporters in a forum where she explained the mandate and procedures being followed by the AMLC, the lead agency tasked to ensure that dirty money would not be laundered in the country.

The AMLC official, however, refused to answer questions pertaining to the transfer of money from Bangladesh Bank to fictitious accounts at the Rizal Commercial Banking Corp. (RCBC) branch on Jupiter Street in Makati City before they were later on laundered in three local casinos before being taken out of the country.


Bacay-Abad maintained that AMLC swiftly moved as soon as finding out that the transactions were not only covered or in excess of P500,000 within one banking day but also suspicious, despite a number of steps to verify information and then go through the court system before freezing an account.

The official nonetheless disclosed that only nine to 10 financial analysts at AMLC go through the millions of covered transactions and hundreds of thousands of suspicious transactions throughout the financial system. AMLC data showed that last year, over 36 million transactions were deemed covered on top of more than 146,000 flagged as suspicious.

Bacay-Abad said the proposal to give the AMLC power to slap a cease-and-desist order to immediately freeze a suspicious account even before securing the Court of Appeals freeze order would be “helpful,” although she said it would be up to legislators who were proposing to amend the AMLA.

She added that AMLC would propose to Congress the inclusion of the gaming and real estate sectors under AMLA’s coverage.


“We want to strengthen the supervisory authority of the Bangko Sentral ng Pilipinas (BSP) on remittance companies,” she added.

The official refused to comment on the involvement of the remittance firm Philrem Service Corp. in the money laundering case.

“There is no place for noisy and talkative people in AMLC. I am not evading you; I am just doing my job” Abad said, citing confidentiality provisions under existing laws.


Bacay-Abad also said AMLC “[favors] lifting the bank deposit secrecy law.”

“Absolute lifting will be better, but it will be an uphill battle to lift the bank secrecy law,” she said. Legislators had been opposing allowing prying into a wider array of bank deposits.

Also, Bacay-Abad said proposals to ease the bank secrecy law for tax purposes would likewise help in the bigger fight against money laundering. “It will enable other agencies like the BSP, tax authorities and the Securities and Exchange Commission to have access to bank records.”


Separately, the Department of Finance (DOF) said in a statement that it “supports the passage of an amendment to the AMLA on an urgent basis,” citing “legal weaknesses in the banking system.”

“The DOF has long been vocal against the highly restrictive provisions protecting money launderers and tax evaders behind the veil of bank secrecy and thus supports relaxing it under certain circumstances. The DOF likewise supports the inclusion of casinos and real estate dealers in the list of covered institutions for transactional reporting. The DOF believes that the power to suspend transactions ought to be granted to the AMLC, and that the BSP be given supervisory authority over remittance companies,” it said.

“A resurgent economy built on good governance must be willing to constantly reform where there is room for improvement to be found. Our banking system remains strong and stable, owing to the BSP’s even keeled hands, but we acknowledge that there are cracks in our financial institutions people of greed have used to their advantage,” Finance Secretary Cesar V. Purisima said.

“We ought to strengthen the regulatory regimes that govern our money flows. We need a long-term legal remedy by way of an amendment to AMLA,” the finance chief added.

Since tax evasion is not a predicate crime to money laundering, the DOF said the AMLA was “handicapping investigators and depriving the government of the legal means to go after tax evaders, and by extension, money launderers who obviously did not pay taxes for their cash inflows.”

“The Philippines is only one of three countries in the entire world where tax authorities cannot access bank transactions (Switzerland and Lebanon being the other two), and remain only one of two countries in the world where tax evasion is not a predicate crime to money laundering,” Purisima noted.

Bureau of Internal Revenue Commissioner Kim S. Jacinto-Henares was quoted by the DOF as pointing out that, “far too often, criminals have hidden behind bank secrecy laws.”

“It’s time to pierce the veil, within reason and under certain circumstances. If this saga reveals anything, it is that our laws need a serious updating,” Henares said.

Purisima warned that remittances from Filipinos overseas “may be unduly affected and tainted by recent events.”

“A growing number of foreign banks have recently closed accounts of money transfer operators that service our overseas Filipino workers (OFWs). If foreign banks continue to close down more accounts, the cost of remitting money for our OFWs can double,” Purisima said.

“Reforming AMLA will send a message to foreign banks that OFW remittances should not be confused with the dirty money an unscrupulous few have coursed through the weak spots of our system. Reforming AMLA will show our OFWs that we are serious about protecting their hard-earned money,” he added.  SFM

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TAGS: AMLA, AMLC, Anti-Money Laundering Act, Anti-Money Laundering Council, Bangko Sentral ng Pilipinas, Bangladesh central bank, Bank Secrecy Law, Banks, business, Casinos, commercial banks, Crime, financial institutions, Gaming, Global Nation, international banks, Julia C. Bacay-Abad, Justice, Law, Law enforcement, money laundering, OFW, OFW remittances, Overseas Filipino workers, RCBC, real estate brokers, real estate dealers, remittance centers, Rizal Commercial Banking Corp.
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