RP to amend dirty money law to avoid sanctions
RP to amend dirty money law to avoid sanctions
Agence France-Presse, Manila
The Philippine Congress is trying to complete crucial
amendments to a law against money-laundering ahead of a deadline
for sanctions from wealthy countries that could cost the country
dear.
But despite appeals and dire warnings from President Gloria
Arroyo and economic officials, some legislators are still
dragging their heels, prolonging the debate over the amendments.
The Paris-based Financial Action Task Force (FATF), an anti-
money laundering coalition of wealthy countries, has warned the
Philippines that these amendments must be in place by Feb. 12 to
address glaring loopholes in the law which checks money-
laundering.
Ironically, this law was passed only in 2001 after prompting
by the FATF. At the time, the Arroyo government hailed the law as
a landmark achievement that would mollify the fears of developed
countries that drug money or terrorist funds could be laundered
in the Philippines.
But economic officials now concede that certain provisions of
the law rendered it virtually toothless.
The law only allowed the examination of transactions amounting
to more than 4 million peso (US$74,630) and required that the
investigating body get a court order before opening bank
accounts. It also restricted the opening of bank accounts made
before the law was passed.
"The law as it stands now is quite ineffective," said Central
Bank of the Philippines governor Rafael Buenaventura.
He recalled that out of 333 cases of alleged money-laundering
investigated by his commission, it was only given court authority
to open one account.
To address this, the amendments would lower the threshold to
500,000 pesos. It would also allow a special anti-money
laundering council to open bank accounts without a court order
and to examine accounts made before the 2001 law took effect.
Failure to pass the amendments could have dire consequences,
such as wealthy countries imposing lengthy requirements that
would slow down the transfer of funds from abroad to the
Philippines.
This could result in local banks losing their correspondent
bank status with foreign banks.
It will also make the Philippines look less trustworthy,
scaring away investors and traders, Senate banking committee
chairman Ramon Magsaysay said.
Moreover, the estimated seven million Filipinos who work
overseas could find their remittances to their families back home
delayed for weeks. Such remittances are a major source of foreign
exchange for this poverty-stricken country.
"If the remittances are delayed, then the overseas Filipino
workers will start to look for ways and means outside the banking
system to send their remittances to their families and that will
take a toll on our banking system (and) take a toll on the
finances of their families," said Arroyo's spokesman, Ignacio
Bunye.