Senate rejects key anti-money launder law amendments

The Senate decided last night to uphold the secrecy of bank deposits and other financial transactions, rejecting or watering down most of the amendments to the Anti-Money Laundering Act (AMLA) endorsed by the Paris-based Financial Action Task Force (FATF).

Speaker Jose de Venecia Jr., on the other hand, was able to have a House caucus for the passage of the amendments to the AMLA and the ratification of the Absentee Voting Bill to enable President Arroyo to sign the two measures into law by tomorrow, the deadline set by the FATF for the government to amend the AMLA.

The US Embassy is urging both chambers of Congress to beat the deadline, noting that the FATF will immediately impose sanctions on the country.

The Senate voted down an amendment to the AMLA, otherwise known as Republic Act 9160, that seeks to empower the Anti-Money Laundering Council (AMLC) to look into suspicious bank accounts without need of a court order.

It retained Section 11 of RA 9160, which requires the council to get a court order before it can open and examine an account.

The amendment, together with other changes in the law, was presented by the committee on banks chaired by Sen. Ramon Magsaysay Jr.

Senators also rejected another committee proposal that would authorize the AMLC to look into suspicious transactions done before the effectivity of the law.

They later approved the amendatory bill that contains minor alterations in the law, with major changes endorsed by the FATF either rejected or watered down.

The movement to defeat the amendment that would have lifted the veil of secrecy on bank deposits was led by Sen. Joker Arroyo, who said it would violate the constitutional principle of due process.

He said it could be used to harass not only ordinary bank depositors "but also enemies of those in power."

Senators Manuel Villar, Vicente Sotto III, John Osmeña, Loren Legarda, Panfilo Lacson, Gregorio Honasan, Aquilino Pimentel Jr., Loi Ejercito, Rodolfo Biazon, Teresa Aquino Oreta, and Edgardo Angara supported Arroyo’s proposal to keep the court requirement in the law.

Senate President Franklin Drilon and Senators Robert Barbers, Noli de Castro, Juan Flavier, Sergio Osmeña III, Francisco Pangilinan, Ramon Revilla, and Magsaysay voted for scrapping the requirement.

Drilon said "it was indeed difficult to change the rule that has been existing for the past 45 years, but the world has changed vastly over that period."

He said criminals and criminal syndicates are taking advantage of the secrecy of bank deposits to hide their "dirty money" in the banking system.

Drilon cited the recent case of Bureau of Internal Revenue and Land Bank personnel who were allegedly involved in a syndicate that had defrauded the government of hundreds of millions in taxes.

Before the AMLC can get a court order to freeze their funds, the syndicates had emptied their bank accounts, he said.

Voting to keep the court order requirement, Villar assailed the FATF and other international organizations, including the World Bank and International Monetary Fund, saying they dictate what the government should do upon pain of dire financial consequences.

"If these groups were correct, we should have improved economically. How come we are still poor?" he asked.

Pimentel said the FATF and its member-countries should understand that the Philippines is a democracy and "no one, not even the FATF, should come around here telling us what to do." — With reports from Marichu Villanueva, Mayen Jaymalin