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MANILA - (UPDATE 5:30 PM) Legislators have a 4-month window within which to strengthen the country's Anti-Money Laundering Act before the Philippines returns to an international blacklist of dirty money havens, the Bangko Sentral ng Pilipinas said. In response, the chairman of the Senate Banks committee publicly gave assurances such amendments will be done by end of January.
BSP Governor Amando M. Tetangco Jr. said the Financial Action Task Force “strongly encourages” the Philippines to adopt more stringent standards in its anti-money laundering measures than are provided for in existing laws or risk consequences beginning February 2013.
“Through the efforts of the AMLC, the FATF was apprised about the current effort to legislate an amendment to our AMLA to bring the covered predicate crimes and reporting entities up to international standards. Recognizing such effort, the FATF has strongly encouraged us to adopt said standards before February 2013 and in the meantime has kept up in the grey list,” Tetangco said.
The Anti-Money Laundering Council is an inter-agency body tasked with implementing the AMLA.
The Paris-headquartered FATF's grey list includes 22 other countries that have “strategic deficiencies” in their laws against illegal flow of money and terrorist financing.
Blacklisting would increase the cost of remittance transfers, reducing the actual money OFW beneficiaries receive and their spending power.
Remittances account for 10 percent of gross domestic product, fueling consumer spending, which in turn comprises two-thirds of the Philippine economy. Philippine GDP grew 6.1 percent in the first half of this year, making the country one of Asia's fastest-growing economies.
Legislation meant to bolster the AMLA is pending before the Senate. Congress went on a recess starting October 17 just as the FATF held a three-day plenary session to assess the progress of the Philippines in strengthening its anti-money laundering rules.
Congress will resume its session on November 5.
Osmena’s assurance: AMLA bill passed in January
Meanwhile, Sen. Sergio “Serge” Osmena on Monday assured the Paris-based FATF the Senate will pass the remaining amendments to the Anti-Money Laundering Act in January next year.
In an interview after the hearing on the allegedly anomalous P110-billion Arroyo bridges program, Osmena said the Senate is having a hard time passing the remaining amendments because of the controversial inclusion of certain predicate crimes, which is opposed by legislators.
“The Senate is making every effort . . . but we had a difficult time, missed six months of legislative work owing to the Corona impeachment trial, so just give us a little more time, it’s only October, and the Senate is on recess, and will have the Christmas break. Give us until end of January because we will adjourn in February for the campaign period, and they (senators) agreed,” Osmena explained.
Osmena deemed it fortunate that Anti-Money Laundering Council (AMLC) executive director Vicente Aquino had persuaded FATF to give Manila four months to pass the remaining amendments.
However, Osmena described the remaining AMLA amendments among the most difficult legislative task that he had ever had to handle in his entire stay in the Senate, mainly because some legislators do not like adding too many predicate crimes to the anti-laundering law.
“We fought over them. They would not specify their objections on the floor, they are always vague. We are adding nine predicate crimes, and 23 activities to be covered, but those with objections do not want to state it on the floor,” he said.
Osmena, chairman of the Senate Committee on Banks, Currencies and Financial Institutions, said he wanted to include buying real estate in the scope of money laundering activities as is done in the US, which included it in their anti-dirty money laws.
“One of the biggest money-laundering activities in the country is buying real estate. The big drug dealers buy real estate all over. Then after a year or two, they sell. That is now legal and besides, in all countries, real estate dealers are covered,” he further explained.
Aside from the US, countries that adopted the coverage of real estate dealers in anti-money laundering scope are United Kingdom, Japan, Hong Kong, Singapore, Malaysia, Indonesia and Australia.
“We are not being singled out by FATF, those countries are obeying, particularly those countries with which we have economic ties,” Osmena said.
The Osmena committee also wanted to include in the AMLA coverage jewelry stores, pawn brokers, art dealers, insurance companies, and casino and gaming operations, among others.
“[We just need] reporting from pawn brokers, art dealers etc., because art is the easiest way to launder money; and 23 other covered activities,” Osmena said.
Appeal to colleagues
With this, Osmena appealed to legislators to pass the remaining amendments to the AMLA bill in order to avoid blacklisting from FATF, which is dominated by advanced countries.
“It is for the Republic of the Philippines, not for Osmena, this is a requirement by FATF, advanced countries. US is the biggest victims of terrorism and drugs, they covered the loopholes except RP. We will suffer, our banks will be given a hard time in all business transactions,” he said.
Among the predicate crimes to be included in the list are tax evasion, the most contentious crime, and corruption, kidnapping, and smuggling.
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