Toothless

This a re-posted editorial/opinion piece.

For years the Anti-Money Laundering Council has been seeking amendments to give more teeth to the Anti-Money Laundering Act. The proposal has been ignored. This is hardly surprising, considering that some of the country’s biggest launderers of dirty money are those who are tasked to pass the amendments to the AMLA. The law was passed with great reluctance by Congress in 2001 only because the country was feeling the consequences of being included in a blacklist of money laundering havens around the world.

The blacklist was drawn up by the Paris-based Financial Action Task Force, which has been accused of bias in its ranking of countries. Whether or not there is basis for that accusation, the blacklist made financial transactions more costly and difficult in the Philippines. Congress reluctantly passed the law, and the country was removed from the same money laundering category as the Cayman Islands.

But there were enough loopholes in the law to protect the wealth of unscrupulous politicians and their unscrupulous campaign donors and other supporters. The AMLA did not cover many crimes including corruption, drug trafficking and hijacking. In the absence of a law defining terrorism at the time, the crime was also not covered.

Not content with the loopholes in the original AMLA, Congress amended the law in 2003, removing the power of the AMLC to freeze suspicious bank accounts immediately. The Supreme Court also weighed in, requiring the AMLC to first notify the subject of an anti-money laundering investigation before suspicious bank accounts are frozen.

The result: the International Cooperation Review Group of the FATF has included the Philippines in a list of so-called vulnerable jurisdictions, among which are Nigeria, Vietnam, Cambodia, Bangladesh and Myanmar. This law, if given more teeth, can be a powerful tool against corruption. Now that the Philippines is led by a man who has vowed to follow the straight path, perhaps the Anti-Money Laundering Council will finally get the tools that it needs to perform its job effectively.
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Source: The Philippine Star, Aug. 20, 2011
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