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Philippine senate races to fortify anti-money laundering law

Publication Date : 06-02-2013

 

Pressure to ratify a bill strengthening the Anti-Money Laundering Act (Amla) at the soonest possible time has forced Philippine legislators to drop a provision requiring casinos to report the presence of suspected money launderers on their premises.

Senator Teofisto “TG” Guingona III said “time is running out” for Congress to come out with amendments to Amla as required by the Financial Action Task Force (FATF), a global group monitoring terrorist financing.

The Senate approved its set of Amla amendments on second and third readings on Monday night.

Congress needs to ratify the measure by Wednesday at the latest or risk inclusion in the FATF blacklist.

It was Senate President Juan Ponce Enrile who suggested the casino requirement, saying money launderers would sometimes pose as gamblers in efforts to launder illegally acquired cash.

The Amla amendment version passed by the House of Representatives does not contain a similar provision.

Guingona had predicted before the bicameral meeting began that the casino provision would spark disagreements between senators and House members tasked with reconcilling their versions of the Amla amendment bill.

Rather than face a deadlock and miss the FATF’s deadline next week, the bicameral body chose to leave out the casino provision and proceeded to approve the rest of the amendments.

Guingona said the Philippines would face inclusion on the FATF blacklist should it fail to enact a new law on money laundering.

Blacklist consequences

A blacklist could mean difficulties for overseas Filipinos sending money home as more documentation would be required from them as a result of the country’s blacklisting.

Guingona said though that the deletion of casinos from institutions covered by a requirement to report transactions of 500,000 pesos (US$12,200) and above would favour money launderers who choose to wash their illegally acquired cash in these establishments.

“That is the problem but it’s better to have a law than no law at all. Otherwise, we would end up in the blacklist,” he explained.

Guingona said the incoming 16th Congress would provide a new opportunity to amend the law once more and open debates on the inclusion of casinos.

Requirements

The bill that still needs to be ratified by both Senate and House require:

– Foreign exchange dealers, money changers, remittance agents, preneed companies, and money and securities managers to report transactions of 500,000 pesos and above to the Anti-Money Laundering Council (AMLC).

– Dealers of precious metals and precious stones to report to the AMLC transactions of 1 million pesos and above.

– Real estate agents to report transactions of 500,000 pesos and above to the Land Registration Authority.

New provisions

Also among the new provisions is one that allows the AMLC to request an ex parte (for one party) court order to freeze a suspected launderer’s bank accounts through the Office of the Solicitor General.

This means the court would no longer have to inform the depositor that his or her cash deposits would be frozen as he or she is being investigated by the AMLC.

The ex parte order also allows the AMLC to forfeit cash deposits and properties “having equivalent value to cash” of a suspected launderer whose acquisition of the assets was related “in any way to an unlawful activity or money-laundering offence.”

Other penalties include 7 to 14 years’ imprisonment and a fine not less than 3 million pesos but does not exceed twice the value of the laundered assets.

Directors, officers or personnel who knowingly participated in the commission of money laundering would likewise be charged.

*US$1=40.6 pesos

 

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