Japan puts pressure on RP over money-laundering

Japan puts pressure on RP over money-laundering

Agence France-Presse, Manila

Japan is making it more difficult for Filipino workers there to
transfer money to the Philippines banking system after a global
money laundering watchdog blacklisted Manila, a Filipino official
said Monday.

Senate President Franklin Drilon said a Philippine National
Bank (PNB) official had informed him that the Japanese postal
authorities had rejected a PNB application last month to set up a
remittance system for the estimated 186,316 Filipinos living in
Japan.

The news followed a decision Friday by the Paris-based
Financial Action Task Force (FATF) to recommend additional
counter-measures against the Philippines, due to the failure to
remedy loopholes in Manila's 2001 anti money-laundering statute.

Congress last week beat a Feb.12 deadline to pass amendments,
but the FATF, set up by the Organization for Economic Cooperation
and Development, said the new measures failed to address
"previously identified deficiencies" in the law.

Drilon said PNB senior vice president for Asia Isabelita
Manalastas told him the Japanese postal system had rejected the
remittance system because the Philippines was still on the FATF
blacklist.

"In other words, each and every (Filipino worker) transferring
money using the Japanese post office's automated teller machine
is suspect of possible money laundering," Drilon quoted
Manalastas as saying.

The FATF has given the Philippines until March 15 to enact the
changes or be hit by counter-measures, which Filipino officials
warn could lead to delays in financial transactions.

The most seriously affected would be the seven million
Filipinos working overseas who send their salaries home to their
families.

President Gloria Arroyo is to meet Thursday with key
congressional leaders in the hope of convincing them to pass a
law sought by the FATF in a bid to stave off further sanctions,
her spokesman Ignacio Bunye said earlier Monday.

"The point is, everybody should now work together to find a
way by which we could be able to satisfy the requirements of the
FATF," Bunye said.

Arroyo aides said at the weekend that they would ask Congress
to introduce stronger safeguards to meet international standards.

Under the version passed last week, regulators would still
need a court order to look into suspicious accounts unless the
money was suspected to be the proceeds from kidnapping, hijacking
or illegal drugs.

Banking officials say prior court approval made it extremely
difficult to look into an account before the money was
transferred elsewhere.

Arroyo has refused to sign the amendments into law to give
Congress time to meet the FATF requirements.