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Senate’s AMLA take falls short — AMLC

We are pleading for Congress to take the right course by passing a sufficient law which must take effect by 1 February 2021.

Joshua Lao



The Senate approved yesterday its version of a bill seeking to improve the Anti-Money Laundering Act (AMLA) but the Anti-Money Laundering Council (AMLC), which is the agency fighting dirty money, said it will not be enough to avert possible sanctions from the powerful Financial Action Task Force (FATF).

AMLC Executive Director Mel Georgie Racela identified “significant discrepancies” between the House of Representatives’ version and the Senate measure.

The Senate unanimously approved the bill with 21 affirmative votes and zero negative.

Senate Bill (SB) 1945 amended sections 3, 7, 8-A, 10, 12, and 14 of Republic Act 9160 or the AMLA.

The bill seeks to provide more power to the AMLC by “enhancing its investigative powers through express powers of deputization, the power to apply for search warrants, and power to obtain information on ultimate beneficial ownership.”

“There are significant discrepancies between the two versions, which would eliminate the Philippines’ chances of avoiding the FATF International Co-operation Review Group (ICRG) gray list,” Racela said in a viber message.

“We are pleading for Congress to take the right course by passing a sufficient law which must take effect by 1 February 2021. We urge them to do this not for the AMLC nor for the Executive Department but for the Filipino nation, so that the Philippines will not be publicly listed as a risk to the international financial system and suffer the economic consequences,” he added.

Deficiencies listed
“First. Regarding investigation powers, Senate Bill (SB) 1945 only provides for the filing of search warrants before the courts and the deputation/enlistment of other agencies for investigative purposes. It bears stressing that the deputation/enlistment power is already existing and is being exercised by the AMLC,” Racela noted.

According to him, the proposed bill’s counterpart in the House contains a “more comprehensive investigation power” for the Council, which is crucial for it to become an effective financial intelligence unit.

Still, the AMLC executive identified the looser threshold for tax crimes with P25 million for the Senate bill while it was set at P20 billion for the House counterpart.

“It must be noted that the Bureau of Internal Revenue (BIR) has already agreed to the P20-million threshold. Moreover, the P25-million threshold may not be reasonable in addressing the risk of tax crimes and still the highest threshold as compared to various jurisdictions,” he explained.

Improve bill
“In addition, SB 1945 did not delete the non-intervention with BIR affairs provision, which would be counterproductive to AMLC’s coordination efforts with the BIR when investigating tax crimes,” he added.

Racela cited the omission of real estate brokers and developers ad covered persons, which is a “key recommended action” in FATf’s the mutual evaluation report (MER).

“It must be understood that since real estate brokers and developers have direct contact with their customers, they are in the best position to execute AML/CTF preventive measures in the sector as they are primarily involved in the buying and selling of real estate, where money laundering may occur,” he stressed.

“Needless to say, the Philippines cannot demonstrate satisfactory effectiveness if the Senate version is accepted in its current form, which will definitely mean the Philippines’ inclusion in the FATF ICRG gray list,” he added.

As such, the AMLC sought for Congress’ support to pass a law that is responsive to the recommendations in the 2018 MER.

with Hananeel Bordey