In view of recent events that have exposed legal weaknesses in the banking system, the Department of Finance (DOF) supports the passage of an amendment to the Anti-Money Laundering Act (AMLA) on an urgent basis.
The DOF has long been vocal against the highly restrictive provisions protecting money launderers and tax evaders behind the veil of bank secrecy and thus supports relaxing it under certain circumstances. The DOF likewise supports the inclusion of casinos and real estate dealers in the list of covered institutions for transactional reporting. The DOF believes that the power to suspend transactions ought to be granted to the Anti-Money Laundering Council (AMLC), and that the Bangko Sentral ng Pilipinas be given supervisory authority over remittance companies.
Finance Secretary Cesar V. Purisima said, “A resurgent economy built on good governance must be willing to constantly reform where there is room for improvement to be found. Our banking system remains strong and stable, owing to the Bangko Sentral ng Pilipinas’ even keeled hands, but we acknowledge that there are cracks in our financial institutions people of greed have used to their advantage.
We ought to strengthen the regulatory regimes that govern our money flows. We need a long-term legal remedy by way of an amendment to AMLA.”
The DOF also noted how tax evasion is curiously left out of the AMLA, handicapping investigators and depriving the government of the legal means to go after tax evaders, and by extension, money launderers who obviously did not pay taxes for their cash inflows. “The Philippines is only 1 of 3 countries in the entire world where tax authorities cannot access bank transactions (Switzerland and Lebanon being the other 2), and remain only 1 of only 2 countries in the world where tax evasion is not a predicate crime to money laundering,” Purisima stressed, arguing how this unusual arrangement gives unparalleled latitude for the erosion of financial integrity. Switzerland is set to ease their bank secrecy laws as they relate to tax matters by 2017.
Commissioner of Internal Revenue Kim Jacinto-Henares added, “Far too often criminals have hidden behind bank secrecy laws. It’s time to pierce the veil, within reason and under certain circumstances. If this saga reveals anything, it is that our laws need a serious updating.”
Meanwhile, Purisima noted how remittances sent by honest, hardworking Overseas Filipino Workers (OFWs) may be unduly affected and tainted by recent events. “A growing number of foreign banks have recently closed accounts of money transfer operators that service our OFWs. If foreign banks continue to close down more accounts, the cost of remitting money for our OFWs can double.
Reforming AMLA will send a message to foreign banks that OFW remittances should not be confused with the dirty money an unscrupulous few have coursed through the weak spots of our system. Reforming AMLA will show our OFWs that we are serious about protecting their hard-earned money,” Purisima added.
