RP faces sanctions over ‘dirty money’ measure

The Bangko Sentral ng Pilipinas (BSP) has warned the National Government that the continuing delay in the passage of an anti-money laundering law will result in serious problems for the country.

BSP Governor Rafael Buenaventura said the country will face sanctions if it misses the Sept. 30 deadline set by the Financial Action Task Force (FATF). The deadline is for the passage of an anti-money laundering bill now pending in Congress.

The bill proposes an interagency body that will look into cases of possible money laundering. It provides that bank transactions exceeding P500,000 will immediately be subject to scrutiny.

The BSP chief said one possible impact of FATF sanctions is that the international movement of legitimate or clean money from the Philippines will experience delays in processing as banking authorities of other countries will be more strict in requiring documentary proofs of ownership. "Delays are a very expensive nuisance"

He said the Philippines could be subject to strict and rigid clearing systems in transactions with countries that have strong anti-money laundering laws.

Bankers said payments from the Philippies moving overseas are likely to be scrutinized thoroughly leading to delays.

Thus, the usual overnight payments, may take three to four days to complete, they said. This, they added, is a big disincetive to multi-national which are remitting funds overseas.

They pointed out that while most of the payments are made electronically nowadays, transactions emanating from the Philippines, being under scrutiny, will be done manually.

"Imagine the delays, the additional costs, and maybe the danger of losing business due to these disruptions. The downside is very significant, and I am not sure whether Congress understands or fully appreciates the situation. It is a serious issue, and I do not underestimate the issue," one foreign banker said.