Easing bank secrecy laws will aid in the implementation of the Anti-Financial Account Scamming Act (AFASA) in going after financial criminals — including corrupt politicians — according to Bangko Sentral ng Pilipinas (BSP) General Counsel Roberto L. Figueroa.
Speaking on the sidelines of the BSP’s recent interagency Information Sharing Agreement (ISA) signing on Friday, Figueroa said the central bank’s proposed reforms to the country’s existing bank secrecy laws will enhance AFASA’s ability to go after financial scammers, from small-time crooks to politicians implicated in graft and plunder.
“[The existing] bank secrecy law[s] — that’s the problem right now,” he said. “One limitation of AFASA is that if we invoke our powers under AFASA, the information we gather can only be used for investigating and prosecuting violations of AFASA. Now, the relaxation or the easing of the bank secrecy law, that would be broader,” he added.
Bank account secrecy is primarily governed by Republic Act 1405 and Republic Act 6426. These laws make bank deposits confidential and generally prohibit disclosure, except in limited circumstances, such as court orders, impeachment proceedings, or authorized investigations under other laws, such as the Anti-Money Laundering Act.
The purpose is to protect depositor privacy and maintain trust in the banking system.
Republic Act 12010 (AFASA) introduced a targeted exception to these secrecy protections.
Probe allowed if used in scams
When financial accounts are suspected of being used for scams, the Bangko Sentral ng Pilipinas and relevant authorities may investigate and verify transactions even if this requires accessing otherwise confidential bank information. In these situations, certain secrecy and privacy restrictions under existing laws do not apply.
At the onset of investigations into the flood control scandal last year, AFASA was invoked by the BSP for the first time to investigate suspicious accounts used to move illicit funds, obtain banking information despite bank secrecy restrictions, and require banks to temporarily hold suspicious funds for 30 days, all while coordinating with relevant law enforcement personnel.