Senate panel releases report on $81-M laundering probe
ADEADLINE- BEATING Senate Blue Ribbon Committee report on the $ 81- million money laundering of stolen Bangladesh funds lists three key legislative and policy recommendations that the 17th Congress should pursue to prevent a repeat of the scandal that tainted the Philippines’s image in the international community.
The draft report is expected to be presented to plenary, as the chamber holds its final session on Monday.
Among the key legislative and policy recommendations arising from the committee hearings— seven in all— are the passage of a bill including casinos among covered institutions under the AntiMoney Laundering Act ( Amla); amendment of Republic Act ( RA) 9160, or Amla, to strengthen the powers of the Anti- Money Laundering Council ( AMLC) to detect, act on and sanction violators; relaxing bank secrecy of peso deposits; and amending the foreign- currency deposit law.
There appears to be a gap in the wordings of the law in a situation of a fictitious account.”—Senate Blue Ribbon Committee
The panel recommends passage of Senate Bill (SB) 2106, also known as “An Act Designating Casino Operators as Covered Persons Under RA 9160 ( Amla of 2001).” The bill was first proposed with a view to regulating casinos to prevent their use to hide money for financing terrorism.
Under SB 2106, casino operators, with respect to their gaming operations, will be designated as covered persons under RA 9160.
For purposes of casino-related
transactions, casino operators are required to comply with customer identification requirements, record-keeping, and to report covered and suspicious transactions, under a proposed change in the moneylaundering regime. SB 2106 sets the minimum for covered transactions in casinos at P3 million.
SB 2106, according to the committee, also “gives the AMLC authority to inquire into, or examine any particular account” with any casino operator deemed related to any unlawful activity or moneylaundering offenses, as defined under RA 9160.
According to the Blue-Ribbon Committee, passing SB 2106 into law “will ensure that there will be no loophole in the country’s antimoney-laundering mechanisms.”
Relaxing bank secrecy
MEANWHILE, the committee also proposes relaxing restrictions under RA 1405 on the confidential nature of bank deposits.
It also proposes lifting the confidentiality of foreign- currency deposits under RA 6426, or the foreign-currency deposit system law.
During the hearings, the Senate probers were aghast by the dilemma presented by private bank RCBC on divulging to authorities the details of four bogus accounts opened in its Jupiter branch. RCBC officials said— and senators disputed— they could not simply divulge this without the waiver of account holders as required by existing law.
The Blue- Ribbon Committee said: “One of the problems that the committee encountered during the hearing is the application of the bank- secrecy law to the case. RCBC was hesitant in disclosing details on the fictitious accounts for fear of violating our bank- secrecy laws.”
“There appears to be a gap in the wordings of the law, in a situation of a fictitious account. There is no depositor that can waive the application of the bank secrecy. A strict interpretation of the law will then result in a preposterous situation of a fictitious account being protected by our bank- secrecy laws,” it added.
It is high time for the Senate, said the panel, to “reexamine the purpose of our bank- secrecy laws and to make the corresponding amendments to ensure that our bank- secrecy laws will not be used to hide criminal transactions.”
WITH regard to amending RA 9160, or the Amla, the Committee endorsed 16 key recommended changes as pitched in congressional hearings by the Department of Finance ( DOF). Effecting such changes to RA 9160, said the draft panel report “will ensure a more comprehensive approach in combating money laundering in our country.”
The 16 proposed amendments were listed by Finance Secretary Cesar V. Purisima in a letter to the Blue-Ribbon Committee. Some of the key changes sought are:
including casinos, real- estate brokers, art dealers and motorvehicle dealers as covered persons under Amla;
setting different categories— but both covered persons—for the “jewelry dealers” and “dealers” in previous metals and stones;
clarifying the definition of covered transactions, depending on the covered person;
designating the Bangko Sentral ng Pilipinas ( BSP) as supervising authority of foreign- exchange dealers, money changers, and remittance and money- transfer businesses for the purpose of the Amla;
adding the fol lowing as unlawful activities under Amla: violation of firearms and ammunition regulation act, cybercrimes, violation of Strategic Trade Management Act (regarding weapons of mass destruction) and tax evasion;
allowing the BSP to check Amla compliance of covered persons under its supervision or regulation;
increasing monetary penalty for administrative sanctions.
A proposed DOF amendment to Amla— which the Blue- Ribbon Committee adopted— seeks to authorize the AMLC, instead of the Court of Appeals, to issue ex parte freeze orders with respect to some unlawful activities.
Another amendment authorizes the AMLC to check compliance with the Amla by covered persons not under any supervising authority.
The AMLC will also be authorized, under another amendment, to issue subpoena and administer oath in aid of its investigation and compliance- checking functions.
Under another amendment endorsed by the Senate panel, covered persons would be allowed to temporarily withhold transactions not exceeding two banking days from occurrence of a transaction, in the course of verifying whether the transaction is suspicious or not, and terminate the transaction or account if they find reasonable belief that there is possible violation of the Amla.
The Committee also endorsed a DOF-initiated amendment that reduces the required quantum of evidence as basis for an authority to inquire into, or examine, bank accounts or investments.
It also recommended adding unlawful activities to those exempted from the requirement of a court order before a bank inquiry may be conducted.
The Blue- Ribbon Committee conducted an inquiry into the banking scandal after the Bangladeshi government complained its central bank had lost $ 81 million to cyber hackers, who caused the Federal Reserve of New York— where Dhaka’s central bank has an account— to clear the transfer of funds to the Philippines.
The money, which landed to four individual accounts, was then laundered in two casinos.