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Sunday, May 15, 2016

Money Laundering: PHL officials want casinos under AMLA, bank secrecy law relaxed

PHL officials want casinos under AMLA, bank secrecy law relaxed

Photo from (Twitter: @sandraguinaldo)© Provided by Mediamerge Corporation
Photo from (Twitter: @sandraguinaldo)

On the heels of the $81-million money laundering scandal, the Department of Finance (DOF) has presented to Congress a joint proposal to amend and strengthen the Anti-Money Laundering Act (AMLA) and ease some restrictions under the Bank Deposit Secrecy Law for tax evasion purposes.
In a joint statement on Tuesday, the DOF, the Anti-Money Laundering Council (AMLC), and the Bangko Sentral ng Pilipinas (BSP) noted they proposed that casinos be included within the purview of an amended Republic Act No. 9160 or the AMLA of 2001.
"The banking and financial system of the Philippines remains stable and strong. To respond to emergent risks and challenges, we are proposing a thorough update of the Anti-Money Laundering Act to further strengthen our regulatory institutions in safeguarding a robust financial system," BSP Governor Amando M. Tetangco Jr. said.
This is in line with the recommendation of the Financial Action Task Force (FATF) to include casinos, among others, as covered entities under the law.
The proposed amendments entail the inclusion of tax evasion as a predicate crime to money laundering, and the widening of the regulatory powers of the AMLC.
This includes authorizing the AMLC to issue subpoenas and ex parte freeze orders with respect to certain unlawful activities, and adding unlawful activities that are exempted from the requirement of a court order before a bank inquiry may be done.
Monetary penalty
"The proposed bill also increases the monetary penalty for administrative sanctions," the DOF said.
"Among the amendments is the designation of the BSP as the supervising authority over foreign exchange dealers, money changers, and remittance, and money transfer businesses for the purposes of the AMLA," it added.
The DOF also proposed to amend the Bank Secrecy Law (RA 1405) and the Foreign Currency Deposit Act of the Philippines (RA 6426) and lift certain restrictions on bank secrecy of both peso and foreign currency deposits.
"We are one of only three countries in the entire world where our tax administration cannot access bank transactions for tax evasion purposes. We are one of only two countries in the entire world where tax evasion is not a predicate crime to money laundering," Finance Secretary Cesar V. Purisima said.
The proposed amendments could help the country be internationally competitive, Purisima noted.
Unscrupulous few
"While the tax gap has narrowed since 2009, we still have a long way to go in plugging the 4 percent of GDP (gross domestic product) lost to tax evasion. It's high time we keep up with international standards and pierce the veil the unscrupulous few have conveniently hidden behind," he added.
For her part, Bureau of Internal Revenue (BIR) Commissioner Kim Jacinto-Henares cited the need for the amendments.
"Our unduly restrictive bank secrecy laws tie the hands of our revenue generating agencies," she said.
"To illustrate, in 2013 bank deposits grew at 33 percent, while BIR collections grew by only 15 percent while in 2014 bank deposits grew at 13 percent while BIR collections lagged behind, growing only at 10 percent. When numbers don't add up, we know something's up. The proposed AMLA amendments ought to right this wrong," she added.
The BSP in April said it was working with the AMLC to review the laws, given the controversial $81-million money laundering scheme involving still unidentified hackers who stole the funds of the Bangladesh Bank with the Federal Reserve Bank of New York.
The stolen funds were moved to fictitious accounts with the Jupiter branch of Rizal Commercial Banking Corp. before being transferred to casinos, junket operators, and high rollers. – Jon Viktor Cabuenas/VDS, GMA News

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