THE SENATE Committee on Banks and Financial Intermediaries on Wednesday endorsed for plenary action the measure strengthening the country’s regulations to counter money laundering.
Senate Bill No. 1945 will amend Republic Act No. 9160, the “Anti-Money Laundering Act of 2001,” in line with the recommendations of the Financial Action Task Force (FATF) which sets standards against money laundering and terrorist financing.
“We are implored to immediately act on it by the Asia/Pacific Group on Money Laundering as a form of national economic emergency due to the very serious economic cost, arising from non-compliance,” Senator Grace S. Poe-Llamanzares said in her sponsorship speech, Wednesday.
Failure to enact and implement the AMLA amendments puts the Philippines at risk of being gray-listed, along with Albania, Pakistan and Syria. The Philippines was originally given until October to address deficiencies in the anti-money laundering law, but this was extended by the FATF to February 2021 due to the pandemic.
Its counterpart, House Bill No. 7904, was approved on third and final reading on Dec. 1. Congress has until Dec. 19 to act on the measure before it goes on a month-long break until Jan. 17.
The measure has been certified as urgent by President Rodrigo R. Duterte, allowing the chamber to approve the measure on second and third reading on the same day.
“Being on this (gray list) is a very strong signal to market participants and regulators globally. It has implications which we must avoid as much as we can, especially during the time of a global pandemic,” Ms. Poe-Llamanzares said.
She noted the European Union and other countries will likely impose an enhanced due diligence (EDD) on Filipino nationals and businesses, resulting in additional cost, higher interest rates and processing fees for Filipinos doing business abroad. The EDD will also affect the cost of sending remittances for overseas Filipino workers.
“To make matters worse, the Philippines will incur a ‘reputational risk’ that would certainly result in reduced investor and lender confidence,” the senator said.
“All of these things will be a major setback in our efforts to achieve an ‘A’ credit rating before 2022. This is a scenario that we have to steer away from.”
The bill proposes to enhance the Anti-Money Laundering Council’s (AMLC) investigative powers and to give it the power to apply for a search warrant and obtain information on ultimate beneficial ownership. AMLC will also be authorized to implement targeted financial sanctions on proliferation financing.
The council may also preserve, manage or dispose assets subject to asset preservation order and judgment forfeiture and prohibit the issuance of injunctive relief against freeze orders and forfeiture proceedings.
Under the measure, the AMLA will now cover real estate developers and brokers with single transactions involving at least P5 million. Initial versions of the bill provided for a P1-million threshold, but was increased upon the recommendation of the real estate industry.
The Philippine Association of Real Estate Boards had earlier said the P1-million cap on single cash transactions will affect the promotion of real estate investment in the Philippines.
Real estate activities, according to Ms. Poe-Llamanzares, is widely used as a front for money laundering and terrorist financing. She further noted that internet-based casinos, including offshore gaming operators and service providers, will be covered by the AMLA. — Charmaine A. Tadalan