THE Philippines is on the brink of being returned to the blacklist of global finance regulators if Congress fails to pass the third amendment to the Anti-Money Laundering Act (Amla) before the annual meeting of the Paris-based Financial Action Task Force (FATF) on October 15, Sen. Serge Osmeña said on Tuesday.
“We may again find ourselves being placed in the FATF blacklist,” Osmeña warned as he informed colleagues of the consequences of failure to pass the amending bill demanded by the FATF, which seeks, among others, to expand coverage of the law to include tax evasion as a predicate crime under the Amla.
Before Osmeña took the floor at Tuesday’s plenary session, Sen. Teofisto Guingona III, the principal sponsor of the latest amendments to the Amla, said at least eight senators—Joker Arroyo, Panfilo Lacson, Loren Legarda, Senate President pro tempore Jinggoy Estrada, Miriam Defensor Santiago, Ferdinand Marcos Jr., Ralph Recto and Manuel Villar—have enlisted to interpellate on the measure “but not one was ready” to do so as of Wednesday’s session.
“I just want to put that on record,” Guingona said. He confirmed that the inclusion of tax evasion as a predicate crime is one of the major issues hindering early passage of the bill because his fellow senators are concerned that “tax-evasion cases can be used for political oppression.”
Senate Majority Leader Tito Sotto said “some senators have made reservations” to ask questions on the bill but were not on the floor. Sotto then moved that the Senate resume consideration the Amla amendment bill again when Congress goes back to work on October 9, after the September 22 to October 7 recess.
This prompted Osmeña’s suggestion to invite Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. to join a caucus of the senators to help clarify Amla issues in order to speed up passage of the amending bill before the FATF meeting in Paris from October 15 to 19.
“It would greatly help [the early approval of the amending measure embodied in Senate bill 3123] if somebody like the BSP governor can answer the concerns being raised by the senators in caucus,” Osmeña said.
Osmeña acknowledged the reservations raised by his colleagues on some of the provisions in SB 3123 that he co-authored with Guingona, which would also expand covered institutions to include casinos, jewellers, pre-need companies and insurance firms, among others.
“But we have been through this before when we passed the first Amla amendments sought by FATF,” he said as he confirmed that the FATF is again “asking us to introduce more amendments” because it found the Philippine law to be “porous.”
Osmeña said the Philippines may again be at a disadvantage if it lands back in the FATF blacklist. He said, for instance, that all dollar remittances to the country from anywhere in the world goes to New York. “That means all dollar transactions. If somebody wants to send money to the Philippines from the Middle East, for example, it first goes to New York. And,if a red flag is issued by a regulatory agency like the FATF with jurisdiction to watch closely dollar remittances to the Philippines and more people will be hired to watch us which is additional costs to them and they will just say ‘go to another bank.’ This means local banking will also be hampered.”
“This is why we are asking our colleagues to seriously pass the measure [before the FATF meeting on October 15],” he added. “This is not a partisan measure. It seeks to improve the Philippines’ standing in the rest of the world.”
This developed as Senate leaders reiterated assurances they would give their “best efforts” to pass the amending bill before the annual FATF meeting in Paris next month.
“We will try our best,” Guingona told the BusinessMirror.
The Philippines was removed from the FATF’s dark gray list earlier this year after Congress passed two Amla amendments listing terrorist financing as a predicate crime and allowing authorities to freeze suspected bank accounts without a court order. But the FATF subsequently sought passage of a third amendment to expand coverage of the law to include, among others, jewellers, realty firms, securities traders, pre-need companies and adding tax evasion as a predicate crime.
Guingona remained hopeful the Senate would still be able to pass the third Amla amendment demanded by FATF during its October 15 meeting even if Congress goes on recess September 22 to October 7. He said there is still enough time to do this when the Senate reconvenes session on October 8.
“I cannot say if we will be downgraded again or not,” he said, adding, “It will depend on how the FATF will see what we are doing now to pass the bill. We hope they will see that we are giving it our best efforts.”
Senate President Juan Ponce Enrile earlier said senators would act on the measure, despite misgivings by some senators over some of its provisions.
“We will try our best to do everything that we have to do. But we cannot rush things. We have to study these bills. We have to scrutinize the things that we do here and let the judgment of the people be on us,” Enrile said. “We are not brought here to engage in a popularity contest. We are brought here to do our work for the people according to our best lights.”
He added: “All I can say is, we have already done what we have to do; and, there’s a third bill that is being debated.”
Enrile said some of his fellow senators “approached me and talked to me about the introduction of additional predicate crimes like tax evasion. My God! Tax evasion is a function of an entire bureaucracy. That’s’ the BIR. They [already] have plenty of powers to run after tax evaders.”
***
Source: Butch Fernandez, Business Mirror. (19 September 2012)
Comment here