The BSP and the AMLC

The Anti-Money Laundering Council (AMLC) has been commonly associated with the Bangko Sentral ng Pilipinas (BSP) perhaps because the BSP Governor has also been designated by law as the AMLC Chairman and maybe also because the staff of the AMLC secretariat, also by law, hold regular appointments in the BSP. But this is more really by association because if one would look at the respective charters of these agencies, it would show that these have personalities legally separate from each other.

The BSP was created as an independent central monetary authority under RA No. 7653 with the responsibility to provide policy directions in the areas of money, banking and credit. It was also assigned the primary objective of maintaining price stability conducive to a balanced and sustainable growth of the economy. On the other hand, the AMLC was created under RA No. 9160, as amended, to investigate money laundering transactions, receive covered and suspicious transactions reports, institute freeze and forfeiture proceedings for laundered assets, file criminal complaints and impose administrative sanctions for violations of said law. Accordingly, a host of legal cases related to the implementation of RA No. 9160 have been initiated, prosecuted or defended in the name of the AMLC.

What could have been the rationale for the relationship of the BSP Governor with the AMLC considering that anti-money laundering was not part of the core functions of the BSP. We also do not see such situation to be a worldwide trend insofar as governors in other central banks are concerned.

Based on my recollection of the congressional deliberations for the enactment of the anti-money laundering law, there was a consensus to entrust the implementation of the law to the financial sector thereby resulting in Section 7 of the law stating that the AMLC “is hereby created and shall be composed of the Governor of the Bangko Sentral ng Pilipinas as Chairman, the Commissioner of the Insurance Commission and the Chairman of the Securities and Exchange Commission, as Members.”

To further ensure that the AMLC will be assisted by career officials, upon the motion of then Makati Representative Teodoro Locsin Jr., Section 8 of the same law provided as follows “all members of the Secretariat must have served for at least five years either in the Insurance Commission, thru Securities and Exchange Commission or the Bangko Sentral ng Pilipinas and shall hold full-time permanent positions within the BSP.”

Regarding the holding by the members of the AMLC Secretariat of full-time permanent positions in the BSP, my understanding is that it is more for operational and budgetary expedience so as to implement immediately the law.

The passage of an anti-money laundering law was deemed urgent to address money laundering threats confronting the country. Congress may thereafter appropriate the budget for the operations of the AMLC and its Secretariat as indeed Section 22 of RA No. 9160 stated that “appropriation for the succeeding years shall be included in the General Appropriation Act.” ***** The above comments are the personal views of the writer. His email address is jzuniga@bsp.gov.ph