PH on US list of major money launderers

By: Leila B. Salaverria | 02:59 AM March 20th, 2016

The next President should make the easing of the bank secrecy law one of his top priorities because of the embarrassing position in which the country has found itself in the alleged laundering of $81 million stolen by hackers from the central bank of Bangladesh, according to Sen. Sergio Osmeña III.

Osmeña said amending the law has now become a necessity with the Philippines being identified as one of the major money-laundering countries in 2015 in a report on money laundering and financial crimes by the US State Department released earlier this month.

Osmeña joined an earlier call made by Bangko Sentral ng Pilipinas Governor Amado Tetangco Jr., who also chairs the Anti-Money Laundering Council, to amend the “very strict” Republic Act No. 1405, or the Law on the Secrecy of Bank Deposits, which he said was one of the obstacles in fighting money laundering.

But with the latest controversy over the theft of $81 million from the Bangladesh central bank’s US account that was transferred to the Philippines where it vanished without a trace, there may be hope that his longstanding proposal, which has been stymied in Congress, to amend RA 1405 will prosper, Osmeña said.

“I hope this puts pressure on the next administration to give it priority, because it’s embarrassing. This is, No. 1, the biggest bank scam in Asia. People will say, ‘Do not send money to the Philippines because it’s a money-laundering center,’” Osmeña said.

It emerged in a Senate investigation into the theft that the $81 million stolen last February from the US Federal Reserve account of the Bangladesh central bank was wired to the Jupiter, Makati City, branch of Rizal Commercial Banking Corp. (RCBC). The funds were then passed on to a foreign exchange broker, which transferred some $30 million in cash to an ethnic Chinese man who is believed to be a casino junket operator and the rest into accounts at two casino companies.

Serious concern

Osmeña said the US State Department had identified the Philippines as one of the major money-laundering centers in the world in a report issued this month.

He was referring to the International Narcotic Control Strategy Report of the department’s Bureau for International Narcotics and Law Enforcement Affairs, which was posted in the US State Department website earlier this month.

“Money laundering is a serious matter in the Philippines because of its international narcotics trade, high degree of corruption among government officials, trafficking in persons and the high volume of remittances from Filipinos living abroad,” the report said.

Criminal syndicates

It said the Philippines faces challenges from sophisticated transnational drug-trafficking organizations (DTOs), including “Hong Kong triads,” or criminal syndicates, that use the country as a drug transit country for illegal drugs, mainly cocaine and methamphetamine.

“These DTOs use the Philippine banking system, commercial enterprises, and particularly casinos, to transfer drug proceeds from the Philippines to offshore accounts,” it said.

“Other transnational criminal organizations, including groups based in Africa, are expanding their presence throughout East Asia and will likely continue to exploit the Philippine financial system to launder and transfer drug-trafficking proceeds,” it added.

It also said insurgent groups in Mindanao clean dirty money through ties to organized crime, with the funds obtained from kidnapping-for-ransom activities and arms trafficking, and potentially narcotics.

Casinos the weak link

The report also said organized crime groups have infiltrated casinos in the region and have facilitated prostitution, narcotics trafficking, loan-sharking, and suspect junket and VIP gaming tours.

“International experts and observers note that the Philippine casino industry is a weak link in the country’s AML/CFT (anti-money laundering/combating the financing of terrorism) regime,” it said.

It also took note of the findings of the Global Financial Integrity that ranked the Philippines eighth in the world with regard to illicit outflows primarily due to abusive trade mis-invoicing, a form of trade-based money laundering.

The report also said the Anti-Money Laundering Council, throughout 2015, continued its efforts to amend the Anti-Money Laundering Law (Amla) to include casinos, but was hampered by politics.

“Progress has been slow as national elections near and because of extensive lobbying from the casino industry. Considering unsuccessful attempts in the past, the inclusion of casinos under the Philippines’ AML/CFT regime may not occur absent sustained international pressure,” it said.

It also noted that Congress did not approve the inclusion of real-estate agents in the expanded list of covered institutions under the amendments to the Amla. It is thought that the high end of the country’s booming property development sector also caters to foreigners who may be laundering money.

Leni for amendment

Camarines Sur Rep. Leni Robredo on Saturday said she agreed that the country’s tough bank secrecy law should be amended to prevent criminal syndicates from using the Philippines to launder dirty money.

“From the start, I have been campaigning for the bank secrecy law to be eased up because while the primary purpose of it is to protect the depositors, it’s being used to cover up wrongdoing,” Robredo, a vice-presidential candidate of the ruling Liberal Party, said while campaigning in Santa Rosa, Laguna province.

Robredo, who who attended a “Zumba for Leni” event organized by Santa Rosa Mayor Arlene Arcillas and Laguna Rep. Dan Fernandez, said individuals seeking elective posts should show the way by making available details of their banks deposits to the public.

“While the law has yet to be relaxed, I think it’s incumbent upon us candidates to issue an authorization allowing the public to scrutinize our bank records once we filed our COCs (certificates of candidacy),” she said. With a report from Marlon Ramos

Source: www.business.inquirer.net