Se­nate panel re­leases re­port on $81-M laun­der­ing probe

Business Mirror - - FRONT PAGE - By Butch Fer­nan­dez @butch­fBM

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.”

Amla amend­ments

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.

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