Changes needed in money laundering law – Bautista

Securities and Exchange Commission (SEC) Chairperson Lilia Bautista has admitted it would take changes in the Bank Secrecy Law and minimum capital provisions in the Anti-Money Laundering Act (AMLA) for the Philippines to finally break out of the dreaded list of non-cooperative countries by the powerful Financial Action Task Force (FATF), the Paris-based global "dirty money" watchdog.

"They (FATF) were not satisfied with these that I think it’s best to look at possible amendments," she added.

In a recent report, the FATF retained the Philippines in the list of so-called "non-cooperative" countries on money laundering due to its failure to relax the tight Bank Secrecy Law and impose a lower monetary threshold for "suspicious transactions."

This despite the country’s frantic efforts since last year to please the FATF, barely beating the group’s deadline in passing the AMLA last Sept. 30. An Anti-Money Laundering Council (AMLC), composed of the heads of the Bangko Sentral, SEC and Insurance Commission, has been formed to oversee the Act’s implementation.

The term "money laundering" covers all transactions designed to conceal the origin or to change the identity of money obtained from criminal activities, such as drug trafficking and smuggling, so that it would appear to have originated from a legitimate source.

Bautista said the FATF has found the country’s bank secrecy law as "too tight" and has batted for the imposition of a lower threshold before prying in suspicious bank accounts, presently pegged at P4 million or the equivalent of $80,000.

The FATF report said there are also loopholes in the AMLA which have kept bank records suspected of containing laundered money beyond the reach of authorities.

"They can’t understand why the regulators can’t look into these bank accounts," Bautista said.

While the law allows the AMLC access to suspicious bank accounts upon securing a court order, a major loophole remained under the Bank Secrecy Law that protects deposits made before Oct. 17, 2001.