OFWs feeling pinch of delay in launder law changes – Solon

Pro-administration Sen. Ramon Magsaysay Jr. lashed out at those who continue to dismiss the negative effects of the non-passage of the amendments to the Anti-Money Laundering Act (AMLA) to financial transactions and remittances of millions of Filipino workers abroad.

Magsaysay said that this early, the effects of the delay by Congress to amend the AMLA are already being felt by families of overseas Filipino workers (OFWs) who remit money through foreign banks.

He issued the statement after certain senators alleged that OFW remittances were individually insignificant or "too small" to be covered by countermeasures.

Sen. Aquilino Pimentel earlier said that officials of the Bangko Sentral ng Pilipinas (BSP) and the Department of Finance (DOF) "should give factual, categorical answers, instead of issuing vague, unverified threats" that the dollar remittances of OFWs would be delayed unless the AMLA is amended.

"The BSP and DOF should answer squarely questions pertaining to the amendments to the AMLA imposed by the Financial Action Task Force (FATF). They should not threaten OFWs with vague sanctions," Pimentel said.

He added that "we have to rid the country’s banking system of dirty money but we must protect the OFWs and the national interest."

The FATF was set up by the Group of Seven (G7) industrialized nations in 1989 to combat global flows of dirty money.

The prescribed changes to the anti-money laundering law have angered some Philippine lawmakers over perceived threats to national sovereignty, while certain members of the powerful elite resist the idea of too strong a spotlight on their financial dealings.

The Senate was supposed to vote on the measures yesterday evening. The House of Representatives is seen following suit later in the week.

Magsaysay, chairman of the Senate committee on banks, financial institutions and currencies, said the remittance of funds amounting to $7.5 billion from 7.3 million OFWs will be subjected to increased scrutiny if the AMLA is not amended by Congress before the Feb. 12 deadline.

He said that in Canada, the correspondent bank relationship with a Philippine bank was terminated due to the Philippines’ continued inclusion in the FATF’s blacklist of Non-Cooperative Countries and Territories.

As a result, a number of Filipino remittance companies operating in Canada had to close shop. The Office of the Superintendent of Financial Institutions of Canada has limited its issuance of license to operate to only two Philippine banks, Magsaysay said.

"Undocumented OFWs in the United States and Europe will be worst hit, considering the expected failure of these workers to comply with the stricter and more rigid requirements in sending money back home," he added.

Magsaysay also cited a report issued by the Association of Bank Remittance Officers of the Philippines president Articer Quebal that said 20 percent of the country’s population – some 16 million Filipinos – depend on remittances from abroad.

The adoption of stricter requirements by financial institutions and regulators abroad will make it doubly difficult for Filipinos to remit money to the relatives they left here, Magsaysay noted.

He added that the delay in remittances, as well as increased transaction costs estimated at $35 per transaction, would amount to at least $490 million per year.

"The hard-earned wages of our OFWs should not be unjustly and unnecessarily gobbled up by such transaction costs but must be sent in full to their families and loved ones in the country," Magsaysay said. – Sammy Santos