Senate panel recommends amendments to AMLA

MANILA, Philippines - The Senate sub-committee on the Anti-Money Laundering Act (AMLA) recommended initial amendments to the provisions on the inquiry and freeze of suspicious bank accounts.

During the hearing conducted yesterday by the sub-committee on the AMLA amendments, the senators agreed that the Senate as a body would initially deal with amendments to sections 10 and 11 of the AMLA in order to make the Anti-Money Laundering Council (AMLC) more effective in carrying out its mandate.

The AMLC had encountered various problems in inquiring and freezing suspicious bank accounts since Republic Act 9194 amended Republic Act 9160 or the AMLA in 2003.

Sub-committee chairman Sen. Teofisto Guingona III cited two cases wherein the AMLC failed to secure a freeze order on suspicious bank accounts that later disappeared.

Former Armed Forces of the Philippines comptrollers Carlos Garcia and Jacinto Ligot were both accused of taking hundreds of millions from the military during their respective stints.

During the hearings on the alleged corruption in the military, it was revealed that Garcia was able to withdraw P128 million from his bank accounts while Ligot took out P748 million, both before the AMLC was able to look into their accounts.

This problem was a result of the Supreme Court ruling on the case of the government against Antonio Eugenio in February 2008 where it stated that a court bank inquiry order could not be issued unless notice is given to the owners of the account, giving them the opportunity to contest the issuance of the order.

Senator Franklin Drilon said that the ruling was erroneous and resulted in the weakening of the AMLC.

“We have to amend section 10 and 11 because of the case of Republic vs. Eugenio wherein the Supreme Court ruled that you couldn’t inquire into an account without informing the depositor, which is really erroneous. It is a supreme error but because it is the Supreme Court that ruled on it, even if it is a supreme error, you follow it,” Drilon said.

Among the recommendations of the sub-committee would be to emphasize that the AMLC could ask the court for a bank inquiry order on its own and without notice to the depositor concerned.

“Because if you notify, it defeats the purpose (of the law). So we will amend the law so it can be done ex-parte and overrule the Supreme Court (in its own ruling),” Drilon said.

Also included in the proposed amendments is a provision that would plug a loophole that was discovered in a case involving NAIA-3 builder PIATCO.

Drilon said that a co-depositor of the account that the AMLC wanted to look into went to court and managed to prevent this from taking place.

“We must therefore amend the law so that the loophole could be covered so the mere fact that it is a co-account should not prevent the issuance of a bank inquiry,” Drilon said.

The sub-committee would also recommend the inclusion of a provision in the law that would require the courts to act on applications for freeze orders within 24 hours from receipt of the application from the AMLC.

AMLC executive director Vicente Aquino lamented that the courts take time in releasing freeze orders and by the time it is issued, the owners of the accounts may have already been able to divert or hide the funds.

He also expressed concern about the confidentiality of the application when it is filed in the courts.

“While we have faith in our courts, if the case matter is brought to the attention of people outside of the AMLC, the confidentiality is jeopardized,” Aquino said.

Guingona said that the sub-committee would tackle the other provisions that need to be amended after the amendments to sections 10 and 11 are completed.