June 25, 2012
THE ROAD TO AMLA: FATF RULES OUT BLACKLISTING PENALTY TO PHL
Two weeks after the Senate of the Philippines and the House of Representatives ratified two important bills that amend the existing Anti-Money Laundering Act (AMLA), the Philippines is now spared from the apparent international backlash that could affect the remittances of millions of overseas Filipino workers.
Senator Teofisto "TG" Guingona III said that everything that the Philippines worked for has finally paid off as the Financial Action Task Force (FATF) has recognized the efforts of the Philippine government to craft measures that will strengthen the AMLA law.
In its meeting in Rome, the FATF member-countries agreed to accept and appreciate the two laws ratified in both houses of Congress and signed by President Benigno Aquino III on June 18. FATF even upgraded the country's dark gray list to gray.
"I am thankful that FATF has acknowledged the commitment of the Philippines to enhance our AMLA law. The two newly-approved measures not only meet the country's international commitments but also affirm the government's policy on transparency and good governance," Sen. Guingona said.
The Senate ratified SB No 3009 (Republic Act 10167) and SBN 3127 (Republic Act 10168) before the Congress ends its session last June 7. The President signed both measures on June 18.
Republic Act 10167 (SBN 3009) allows an ex parte inquiry into the account of persons when there is probable cause that the funds therein are related to money laundering or an unlawful activity or a predicate crime.
RA 10167 likewise seeks to empower the Anti-Money Laundering Council (AMLC) to inquire into not just the main account but also related accounts, defined as "other bank deposits, investments, or other monetary instruments, owned or controlled by the person whose account is the subject of freeze order, or the funds of which originated from, or were transferred to such account."
"As the chairperson of an investigative committee, the Senate Blue Ribbon Committee, I have witnessed the usual scheme wherein funds that are unlawfully acquired or stolen from government are moved from one account to another, with the clear purpose of keeping it away from the reach of the authorities. People have laundered funds from their accounts to the accounts of their wives, brothers-in-law, drivers, and every conceivable person within their network," he said.
Meanwhile, RA 10168 penalizes any person who assisted the principal of the crime by concealing or destroying the effects of the crime, or by harboring or assisting the escape of criminals. The penalty for these offenses is two degrees lower than the prescribed for the principals of terror financing.
"Since terrorism essentially depends on the financing it may obtain, it is a matter of grave and urgent concern to any reasonable government to criminalize the financing of terror. To financially paralyze any terror groups is a serious endeavor towards the more challenging goal of fully eliminating terrorism," Sen. Guingona said.
ROAD TO AMLA AMENDMENT
SBN 3009 was sponsored by Sen. Guingona and Sen. Sergio Osmena. It was filed in the Senate last November 14, 2011. Its counterpart bill in the House of Representatives (HBN 4275) was transmitted to the Senate last December 7, 2011.
The sub-committee on AMLA had a total of five hearings which started last March 8, 2011.
On the September 1, 2011 hearing, the AMLA sub-committee in the Senate decided to split the bill into two. Sen. Franklin Drilon proposed that to have a wide-ranging scope of amendments will delay the process of the bill. SBN 3009 focuses on the granting of ex parte inquiry while its twin bill SBN 3213 proposes to expand the scope of covered institutions and predicate crimes. SBN 3213 is still pending in the Senate.
Improvements on SBN 3009
Some senators proposed amendments to SBN 3009. Senate Majority Leader Vicente Sotto III and Senator Pia Cayetano moved that the definition of "related web of accounts" be refined further. They also moved for the dropping of the word "web" in the "related web of accounts" stated in the bill.
Senator Miriam Defensor-Santiago, for her part, has proposed for the final bill to provide a timeline. On the approved measure, the Court of Appeals shall act on the application to inquire within 24 hours from the filing of application. The final measure likewise includes the proviso that the procedure for the ex parte application of the ex parte court order for the principal account shall be the same with the related accounts.
Sen. Santiago also moved for the removal of two sections in the bill that was included by mistake (sections 13 and 14).
It also includes the proviso stating that the procedure for the ex parte application of the ex parte court order for the principal account shall be the same with that the related accounts. This proviso was suggested by Senators Franklin Drilon and Sotto.
Senators Joker Arroyo and Ferdinand Marcos Jr. both moved that this law provides penal provisions that shall not apply to acts prior to the effectivity of AMLA on October 17, 2001.
SBN 3127 (RA 10168) was filed last February 16, 2012. On June 6, 2012, the House of Representatives adopted SBN 3127 as an amendment to HBN 5015. The measure was crafted to help curb the spread of terrorism by paralyzing the very lifeline of unscrupulous groups and individuals: criminalizing terrorist financing.
This new law penalizes any person who deals with property or funds owned or controlled by terror organizations, or those that have been seized and sequestered pursuant to the Human Security Act.
It also mandates the Anti-Money Laundering Council to investigate any property or funds that are related to financing of terrorism or acts of terrorism.
Sen. Guingona emphasized that RA 10168 penalizes any person who deals with properties or funds owned or controlled by terrorist organizations or those that have been seized and sequestered under the Human Security Act of the Philippines.
WHAT LIES AHEAD?
At the resumption of the next session this July, the last AMLA amendment measure sitting in the Senate will be tackled and hopefully passed. SBN 3123 is under plenary discussions.
The bill aims to significantly expand the number of so-called "covered institutions and persons" or those institutions and individuals required to submit covered transaction reports and suspicious transaction reports within a period of time. It also proposes to expand the list of predicate crimes such as: bribery and corruption of public officers; frauds and illegal exactions; malversation of public funds and property; forgeries and counterfeiting; and anti-trafficking in persons.
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