3 defects cited in RP drive vs money laundering

MANILA, Philippines – Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said over the weekend that the Philippines would have to address three major deficiencies in its legal system, particularly the declaration of terrorist financing as a criminal offense on its own.

Tetangco, who is co-chairman of the Anti Money Laundering Council, just returned from the annual meeting of the Asia Pacific Group on Money Laundering in Australia where authorities reported on the country’s progress in complying with international rules.

Tetangco said the Philippines is compliant with international rules on money laundering but said there are still issues that need to be addressed through legislation.

Tetangco said the international anti-money laundering authorities want terrorist financing to be declared a stand-alone criminal offense instead of just a predicate crime to money laundering.

Moreover, Tetangco said there is a huge list of predicate crimes that would have to be added to the list already provided under the Anti Money Laundering Act.

Finally, Tetangco said there would be a need to address the potentially big loophole in the law by requiring non-financial businesses and professions to report suspicious transactions that could indicate money laundering activities.

These businesses and professions include casinos, lawyers, accountants and other so-called gatekeepers that deal indirectly with financial transactions that could be abused for money laundering purposes.

According to Tetangco, AMLC has also submitted its proposed amendments to the Congressional Oversight Committee (CoC) on Anti Money Laundering for its consideration.

Tetangco said the House of Representatives, under the committee on banks and financial intermediaries chaired by Congressman Jaime C. Lopez, last year conducted a public hearing on two house bills for the amendment of specific provisions of the Anti Money Laundering Act.

The proposed amendments were contained in House Bills 3053 and HB 4784, Tetangco said.

Legislators have already expressed concern earlier that the Philippines might be black-listed for legal short-comings that hamper full compliance with the international anti-money laundering standards.

Chief among the concerns ae questions on the Human Securities Act as well as the pending case before the Supreme Court that essentially suspended all bank inquiries into suspicious transactions.

The Financial Action Task Force on Anti-Money Laundering wants the Philippines to legislate a separate law on financing terrorist activities but officials said the government said existing laws already address this concern.

There was also concern that the decision of the Supreme Court to require prior hearing before the officials could conduct bank inquiries would erode the effectiveness of the Anti Money Laundering Council (AMLC).

In its testimony before the joint oversight committee of the Senate and the House of Representatives, the AMLC said the Human Securities Act already criminalized financing of terrorist activities.

According to AMLC executive director Vicente Aquino earlier, what the FATF wanted was a stand-alone law on terrorist financing to enable the AMLC to go after individuals and entities that finance terrorism.

“Our official position is that our anti-terrorism law already covered and criminalized financing of terrorist activities,” Aquino said.

Aquino explained before the oversight committee that individuals and entities that provide funding for acts of terrorism were already criminally liable for “participation by indispensable cooperation.”

“This means that even if a person or an entity is not directly involved in the terrorist act, they are considered equally liable because without their financing the act could not be committed,” Aquino explained. –Des Ferriols, Philippine Star