RP gets thumbs down for weak anti-money laundering bill
RP gets thumbs down for weak anti-money laundering bill
Mynardo Macaraig, Agence France-Presse, Manila
Industrialized countries have rejected amendments by the Philippines to beef up its anti-money laundering law, giving Manila less than a month to pass better legislation or face painful sanctions.
The threat by the Paris-based Financial Action Task Force (FATF) came at the weekend after the country's bicameral legislature passed amendments to the Anti-Money Laundering Act that fell far short of the global group's demands.
"The FATF has taken the serious step of recommending that its members impose additional counter-measures against the Philippines, due to the failure of the Philippines to enact legislation to address previously identified deficiencies in their anti-money laundering regime," the task force said.
The FATF, a global body for fighting money laundering, gave Manila until March 15 to pass stiffer amendments or be hit by countermeasures.
In reaction to the FATF's disapproval, Central Bank of the Philippines governor Rafael Buenaventura said: "Well, it doesn't come as a surprise."
The government of President Gloria Arroyo had been pushing for the necessary changes to the anti-money laundering law for months but the Senate watered down the amendments in defiance of the FATF.
Arroyo, aware that the amendments would not pass muster, had declined to sign the bill into law.
"We have a small window between now and when the countermeasures take effect within which we can cure (the problem)," Buenaventura said.
Failure to meet the deadline would result in sanctions that would delay financial transactions. Bankers, traders and investors would be hit but the most seriously affected would be the seven million Filipinos working overseas who remit their salaries back home to their families.
Consultancy group Accelerating Growth Investment and Liberalization with Equity has estimated that families of overseas workers could lose as much as 19.8 billion pesos (US$366.7 million) a day due to delays in remittances if sanctions are imposed.
The FATF's main bone of contention is a requirement in the present law that money-laundering probers must get a court order to look into suspicious bank accounts. It wants to remove the need for a court order.
Twelve of the 23 senators voted against lifting the court order requirement, despite pressure from the House of Representatives.
The court order requirement had made the existing anti-money laundering law largely ineffective as funds could easily be transferred out of suspect accounts before they could be opened, observers say.
But the opposing senators charged that lifting it would allow the government to harass political rivals and critics by checking their bank accounts.
Senate President Franklin Drilon said the amendments could be updated if the bill is returned to a bicameral conference committee of both Houses so the senators can revise their version of the bill.
"We can do something about it but we must address the issues to our colleagues in the Senate who voted against the amendment. Otherwise it will be the same result," warned Senate banking committee chairman Ramon Magsaysay.
President Arroyo's spokesman Ignacio Bunye warned the senators: "This is no joke. If the sanctions take effect, all the transactions of our countrymen -- and we're looking at the seven million overseas workers -- they will be delayed."
However Senate opposition leader Aquilino Pimentel remained resistant, saying: "It really looks like our country no longer has independence.
"We do not have the freedom to make laws that are for the good of the people but must follow the FATF and the foreign agencies.
"Maybe the FATF will realize the Philippines is a democracy and we cannot always follow their instructions," he said bitterly.