EDITORIAL - Haven for dirty money

With a vaccine for the 2019 coronavirus disease still unavailable, overseas Filipino workers and businessmen have another possible problem to worry about. Near the end of the year, unless legislation is passed, it would become harder to remit OFW earnings to the Philippines and conduct other international financial transactions.

Finance officials say President Duterte will certify as urgent the bill introducing more amendments to the Anti-Money Laundering Act or AMLA as well as a new Human Security Act that will address terrorist financing. The certification aims to push for the passage of the legislative measures before the country lands in the gray list of the Asia/Pacific Group on Money Laundering. In October last year, the APG placed the Philippines under a 12-month observation to implement reforms against money laundering before sanctions kick in.

Among the measures being pushed is the lifting of bank secrecy laws in cases of tax evasion and money laundering. Other proposed reforms include the expansion of AMLA coverage to tax offenses, financing of the proliferation of weapons of mass destruction, and real estate buying and selling.

The Anti-Money Laundering Council also wants to have subpoena and contempt powers as well as the authority to preserve assets covered by freeze or preservation orders and to retain forfeited assets. The AMLC wants a prohibition on court injunctions on such powers.

Whether a presidential certification will work on Congress remains to be seen. Expanding the coverage of the AMLC has been as painful for lawmakers, it seems, as extracting without anesthetic an abscessed tooth. Only the threat of international financial sanctions compelled the passage of AMLA in 2001.

It took years before corruption and tax evasion were included among the predicate crimes covered by AMLA. And it’s no surprise that lawmakers continue to resist the easing of bank secrecy laws, even if only for tax offenses and money laundering.

Only the funneling to the Philippines through casinos of $81 million, which was stolen in a 2016 cyber heist from the New York Federal Reserve account of the Bangladesh central bank, finally compelled the inclusion of casinos in AMLA-covered organizations. Even this scandal, however, failed to ease bank secrecy laws.

On top of these legal weaknesses is the weakness of law enforcement. How can anyone manage to bring in millions of dollars regularly through the NAIA without raising alarm bells in the AMLC? Why aren’t such huge piles of cash confiscated? Little wonder that dirty money continues to find a haven in the Philippines.