MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) and the Bureau of Internal Revenue (BIR) are pushing for the “easing or lifting” of bank secrecy laws – considered among the most restrictive in the world – as authorities investigate an $81-million bank heist laundered through the country’s casinos and banking system.
“Right now, the prevention of these particular illegal activities like money laundering is being hampered by the very strict bank deposit secrecy law,” BSP Governor Amando Tetangco Jr. said, stressing any move to relax Republic Act 1406 should be made “under certain conditions.”
The BSP chief voiced his opinion before reporters on the sidelines of the Chamber of Thrift Banks meeting.
BIR Commissioner Kim Henares, for her part, said she is for the lifting of bank secrecy laws “for tax purposes.”
The $81 million – owned by the Bank of Bangladesh and stolen by alleged Chinese hackers from the US Federal Reserve Bank – ended up in five accounts in the Rizal Commercial Banking Corp. and in four local casinos.
Bank officials under probe by the Senate Blue Ribbon committee have consistently invoked the bank secrecy law to avoid being grilled by senators on the issue.
Tetangco lamented the law has made the work of the Anti-Money Laundering Council (AMLC) difficult.
“When the case reaches the AMLC, that’s already the investigation stage so the incident already happened. I think we also need to have some kind of preventive measures,” Tetangco, who also chairs the AMLC, said.
In the Senate hearing last Tuesday, AMLC executive director Julia Bacay-Abad said it took the agency almost a month from the transfer of money to secure a court order to freeze six bank accounts.
Worse, by the time AMLC did secure a court order, most of the funds had already been withdrawn and traced to casinos.
“For us to be able to track the flow of funds, we need that extra authority because once the funds go into a bank deposit, that’s it, the trail turns cold and we cannot look into that,” the BSP chief said.
Henares, meanwhile, said the lifting of the bank secrecy law would help her agency improve its collections.
“This is to allow us to broaden the tax base. To be able to look into those accounts who are subject of tax cases,” Henares said in a phone interview, explaining her wish for the lifting of the bank secrecy law.
She noted that the Philippines is just one of three remaining countries – the other two being Switzerland and Lebanon – that keep bank accounts away from taxmen.
“Switzerland will even lift theirs by 2017... My concern is only to give us the power to look if there is a need to,” she said.
“It will also help us in our garnishment orders since sometimes, when we confiscate bank accounts (because of tax evasion), the banks will simply tell us there is no deposit there,” she added.