RP reaches agreement on money laundering reform

RP reaches agreement on money laundering reform

Cecil Morella, Agence France-Presse, Manila

Philippines legislators have agreed with an international financial task force to amend Manila's money laundering law to escape the imposition of sanctions later this month, officials announced Tuesday.

Congress has 11 days to pass amendments to the 2001 anti-money laundering act (AMLA), after the Financial Action Task Force (FATF) rejected changes introduced last month as inadequate and threatened to impose sanctions from March 15.

A delegation of experts from FATF member countries, led by a top anti-terrorism official from the United States and a Japanese financial intelligence official, held two meetings with Filipino legislators on Monday.

The strict half-century old Philippines bank secrecy law, which required judicial approval for inspecting accounts, had been a key sticking point.

"Based on our discussions, the delegation looks forward to seeing the new amendments from the Philippine legislature that will enable the AMLA to meet international standards," a mission statement said.

Noriaki Mizuno, financial intelligence director of the Japan Financial Services Agency, told a news conference that if the Filipino legislators passed what they had pledged, "the countdown would not be applied."

"We have a breakthrough," President Gloria Arroyo's spokesman Ignacio Bunye told reporters.

"It seems that we still have to wait and see, but the word is, we're coming closer to coming up with a satisfactory compromise," he added.

Senate president Franklin Drilon said he was confident the deadline would be met.

A statement from the FATF mission said the delegation believed "a key breakthrough" had been achieved in the discussions with legislators.

Both sides agreed that "general concerns about court orders could be respected" while ensuring regulatory agencies such as the central bank would be able to have access to account information without the need for a court order, it added.

Drilon added that freezing of suspect accounts by the anti- money laundering council (AMLC), the enforcement arm of the money laundering law, would still require court authorization.

The FATF, formed by major developed economies under the Organization of Economic Cooperation and Development (OECD), has placed the Philippines on a global blacklist of 10 "non- cooperative countries and territories".

The FATF has warned that unless amendments were passed in time, Manila faced sanctions including increased scrutiny of international banking transactions, which could affect the remittances of millions of overseas Filipino workers.

Drilon said the legislators also pledged to act on three other areas of concern raised by the mission, including allowing the inspection of suspicious transactions regardless of the amount of money involved.

The amended law would also "remain silent" on whether the AMLC could provide information to FATF member countries "regarding deposits and investments made prior" to the law, leaving it up to the courts to decide, Drilon said.