"ADB will provide consultant services with the expertise in the criminal and civil enforcement proceedings and investigations of money laundering cases involving, but not limited to, the securities industry and the insurance industry," ADB senior financial economist Naomi Chakwin said in a letter to Securities and Exchange Commission (SEC) Chairman Lilia Bautista.
The term "money laundering" covers all transactions designed to conceal the origin or to change the identity of money obtained from criminal activities, such as drug trafficking and smuggling, so that it would appear to have originated from a legitimate source.
Although the government has beaten the FATF’s deadline in passing the legislation, the anti-money laundering work does not end there since the Anti-Money Laundering Act (AMLA) expressly requires the Bangko Sentral, the SEC and the Insurance Commission to promulgate the implementing rules and regulations (IRR) within 30 days after the law’s effectivity, which starts Nov. 16, 2001.
Chakwin said the ADB can provide technical assistance and consultant services in the drafting of the IRR. He said they can provide models or rules and regulations used in other countries with similar securities and insurance regimes as the Philippines.
Aside from short-term training courses or seminars, the ADB assistance will also come in the form of designing a monitoring system and database that will form the backbone for the financial intelligence units for SEC and the Insurance Commission which will be linked to the central intelligence unit of BSP. This includes the establishment of guidelines and regulations and suspicious transactions reporting requirements.
Earlier, the SEC prepared a set of guidelines for broker-dealers of the Philippine Stock Exchange to enable them to detect possible money laundering schemes through the stock market.
The SEC said in the case of stockbrokerage firms, there should be a policy to maintain effective procedures to identify customers whose funds may be connected with money laundering activities. Salesmen, for instance, should take reasonable steps and exercise "due diligence" to enable them to establish to their satisfaction the true and full identity of each client and their sources of wealth, financial situation and investment objectives.
"Whenever possible, the prospective customer should be interviewed personally," the SEC said. As required by the src, salesmen are required to "know" at all times the identity of the persons with whom they are dealing with.