Money-laundering law threshold cut to P500,000

President Arroyo and leaders of Congress agreed yesterday to lower the threshold amount of the Anti-Money Laundering Law from P4 million to P500,000 in compliance with a requirement of the Paris-based Financial Action Task Force (FATF).

The consensus was reached during a Legislative-Executive Development Advisory Council (LEDAC) meeting convened by the President at Malacañang.

Bangko Sentral ng Pilipinas Governor Rafael Buenaventura told LEDAC members that the minimum amount that could trigger a probe, as stipulated by the Anti-Money Laundering Act (AMLA) or Republic Act 9160, failed to meet the FATF requirement.

Despite the enactment of RA 9160, the FATF refused to remove the Philippines from its blacklist of countries that do not cooperate with international efforts to curb money laundering in a bid to neutralize terrorists, illegal drug syndicates and other criminal groups.

Press Secretary Ignacio Bunye, quoting Buenaventura, said the Philippines has been given one year to amend RA 9160 and comply with the FATF requirement.

"According to BSP Governor Buenaventura, for as long as we can show them that we are moving, we don’t really have to worry. If by this time the bill amending the AMLA has been filed, they would be satisfied," Bunye said.

He added that other blacklisted countries have brought down their threshold to $2,000 (roughly P500,000) — the amount that would require alerting the Anti-Money Laundering Council.

In a letter to Buenaventura, the FATF pointed out that while the passage of the AMLA was a significant move, more reforms have to made for the Philippines to be deleted from the blacklist of countries perceived to be not doing enough to fight money laundering.

The FATF, the financial watchdog of the Organization of Economic Development and Cooperation (OECD), said it would not impose sanctions on the Philippine government, but warned the country would remain on the blacklist until a number of concerns were addressed.

Earlier, House leaders agreed on a proposed amendment to reduce the threshold from P4 million to P500,000, close to the minimum amount contained in the US version of the law.

However, Buenaventura said there may be no need for Congress to legislate amendments since the concerns raised by the FATF should be sufficiently addressed by the implementing rules and regulations for AMLA.

Apart from the high threshold, The FATF had also questioned the limited powers of the AMLC to open deposits due to strict bank secrecy and complained that the law was not applicable to deposits and investments made before AMLA was enacted.

"This seriously inhibits the investigating body’s powers and is therefore a serious deficiency," the FATF said.

The task force said the BSP also had limited powers to look into certain numbered accounts.

"It is our hope that your government could take the necessary action, including any legislative amendments as early as possible and provide a time frame for other remedial action on concerns that cannot be addressed immediately," the FATF stated in the letter.

The FATF said it would review the country’s progress during the next plenary meeting in Paris. The head of the FATF review group also sought a meeting with Buenaventura at a regional anti-money laundering conference on June 4-7. — Marichu Villanueva