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.