Senate to review bank secrecy laws

MANILA, Philippines - Senate President Juan Ponce Enrile had expressed his outrage over the apparent wanton disregard of the country’s bank secrecy laws and the lack of concern by the Bangko Sentral ng Pilipinas (BSP) over these illegal acts.

Angered over the alleged leak of information on the accounts of Corona in Philippine Savings Bank (PSBank), Enrile said that the incident has shown that there may no longer be any need to maintain the bank secrecy laws of the country.

During the inquiry conducted by the Senate committee on banks, financial institutions and currencies on the alleged leak last Thursday, Enrile lashed out at the BSP and even the Anti-Money Laundering Council (AMLC) for the unauthorized release of the bank documents of Corona, which was clearly a violation of the bank secrecy laws and placed the Senate impeachment court in a quandary as to how to deal with these illegally acquired documents.

Enrile said that this issue has led him to consider repealing Republic Act 1405 or the Bank Secrecy Law and RA 6426, the Foreign Currency Deposits Act.

He added that even the proposed amendments to RA 9160 or the Anti-Money Laundering Act (AMLA) could even be dispensed with because of the controversy.

“If you cannot assure us that bank secrecy in this country would be of interest to you as the assigned agencies to enforce this law, then why should you maintain these concepts? Why not just let this country be an open society and repeal the bank secrecy laws 1405 and 6426 if the BSP cannot perform its functions in guarding the policy regarding these laws?” Enrile said.

The issue of the AMLA came about after it was revealed by PSBank president Pascual Garcia III that the anti-money laundering expert of the BSP, Jerry Leal, looked into the bank documents of Corona and took out copies of these during an examination conducted by the BSP on the bank in September 2010.

During the initial inquiry conducted by the Senate last week, the BSP was pressed by several senators to explain why they were performing the functions of the AMLC during its examination of PSBank.

BSP deputy governor Nestor Espenilla Jr. cited Section 8 of RA 9194 or the law amending the AMLA, which states that “to ensure compliance with this Act, the Bangko Sentral ng Pilipinas may inquire into or examine any deposit of investment in any banking institution or non-bank financial institution when the examination is made in the course of a periodic or special examination, in accordance with the rules of examination of the BSP.”

Amendments needed

AMLC executive director Vicente Aquino insisted that the AMLA should be amended and the bank secrecy laws modified in order to help the global war against money laundering and terrorist financing.

Enrile argued that even without an AMLA, the government would be able to protect its people from terrorism.

“I’ve been involved in the security of this country for 17 years. We operated under the time when the problem in Mindanao was not like what it is today. It’s almost a war of attrition between our forces and the forces against the government. We were able to control terrorism without a money laundering act,” Enrile said.

“We used the same central bank to handle our own domestic problem. We’re doing this because we want to cooperate with our allies, specifically the United States. That’s the target, the real target of international terrorism. Without that we are not involved,” he said.

In the case of the bank secrecy laws, Enrile said that these are useless if actions such as the alleged leak of the Chief Justice’s bank records continue to take place.

“We are willing to cooperate. But if this is the way that things are happening in this country and it’s being used in order to affect the interest of a Filipino no matter how low or no matter how high he is, then as a legislator, I’ll say why should I do it (amend the AMLA),” Enrile said. 

“In the case of bank secrecy, there’s a policy behind it and yet the Bangko Sentral is not even moving a finger to find out what happened to this particular incident. That’s a policy of congress that’s not being enforced by the Bangko Sentral. Why should we as legislators labor at night to think how to draft a bill, a law, to enforce a policy that will not be enforced anyway,” he added.

Enrile said that he has talked to a member of the Monetary Board, the policy-making body of the BSP, who informed him that no investigation has been conducted on the issue of the leak.

“When there’s a violation, we don’t feel any interest at all to find out satisfactorily what really happened,” Enrile said.

“I cannot believe and I don’t know whether you believe it, I don’t think Mr. Garcia… can you believe the numbers you tagged on the account of the Chief Justice in your bank could be invented by other people without knowing your records or without seeing your records or without having examined your records. The details, the dates, the initials… C’mon we’re not stupid,” he said.

The prosecution panel in the impeachment trial of Corona attached photocopies of alleged PSBank documents showing the specimen signatures and opening account information of the Chief Justice in its supplemental request for subpoena to the impeachment court.

According to the members of the prosecution panel, the documents were given to them by an anonymous source.

However, during the testimonies of Garcia and PSBank Katipunan branch manager Annabelle Tiongson at the impeachment court, they claimed that the attached document presented by the prosecution panel was fake.

Although the document itself appeared to be fake based on the material differences with the original document cited by Garcia, the account numbers indicated there all turned out to be existing in the records of the bank.

Senate Majority Leader Vicente Sotto III has also called for a review of the bank secrecy laws to determine the feasibility of repealing these.

Sotto has filed Senate Resolution 726 directing the committee on banks, financial institutions and currencies to conduct an inquiry for this purpose.

No bearing

Malacañang said yesterday the alleged leak of Corona’s bank accounts could not affect the impeachment case against him since the details of the deposits came from bank officials themselves.

“It will not affect the case since the testimony adduced in the trial came from the bank president himself who disclosed the deposits and the yearend balances,” deputy presidential spokesperson Abigail Valte said, referring to Garcia.

Aside from PSBank, other bank officials also testified on Corona’s accounts which were not included in his statements of assets, liabilities and net worth that he swore under oath.

The Palace expressed belief that this would provide strong basis for the conviction of Corona.

Presidential spokesman Edwin Lacierda said there was an ongoing investigation in the Senate as regards the alleged leak and thus the Palace would not comment.

“Any comment at this point will be pure speculation,” Lacierda said.

Lacierda said the BSP was an independent institution and “we leave it with the BSP governor any action to be taken,” he said.

Reports said the BSP would submit to the Senate on Monday its own report on allegations that Leal leaked Corona’s accounts.

Leal had denied leaking Corona’s bank documents. – With Aurea Calica