Yesterday there was another report, this time from the House of Representatives, that the Land Bank of the Philippines branch in Tokyo may be forced to shut down, also as a result of the FATF’s rejection of the AMLA amendments. Like PNB, Land Bank’s petition to be accredited as a conduit for the remittances of Filipinos in Japan was also turned down by the Japanese postal office.
In fact the Land Bank petition was turned down as early as December. And even if the Japanese had the inside track on FATF decision-making and knew the task force would reject the AMLA amendments, "counter-measures" or sanctions weren’t supposed to start until mid-March.
As for the PNB, sources in Tokyo said the bank’s petition had been under discussion for many months, and the rejection could not have been precipitated by the consequences of rushed legislative amendments in Manila.
There could be some truth to perceptions that the banks’ petitions were rejected because the Philippines is considered a haven for money laundering. But that’s because the country has been on the FATF’s blacklist for nearly two years.
Requirements for individual applications to become a postal bank depositor in Japan are very stringent; how much more for banks wanting to operate postal bank services for foreigners?
To be a postal bank depositor, a foreigner must apply at Japan’s post office. He will need an alien card registration and must show proof that he is staying legally with a regular source of income in Japan. He will need to show his individual personal seal called hanko, which must be duly registered with the local government office.
Before a foreigner is issued this seal – an oblong thingy slightly bigger than our 10-cent coin – Japanese authorities will conduct a check, verifying the applicant’s identity, family background, address and place of work. He is then issued a certificate and he gets his hanko.
The hanko does not guarantee acceptance as a postal bank depositor. The post office has the discretion to turn down any application without giving any reason. You can have a doctorate with a high-paying legitimate job and 10-year residency in Japan and still have your application turned down.
You can see how much tougher it would be for a Philippine bank to get accredited by Japan for the remittances of Filipinos in that country. So why are we getting this spin about the inadequate AMLA amendments? You almost want to believe Sen. Joker Arroyo’s claim that a public relations firm is behind the spin.
The Americans of course have been among the most aggressive in cracking down on dirty money. Since the terrorist attacks on Sept. 11, 2001, Washington has been trying to plug loopholes in the international financial system that terrorists are exploiting to fund their activities. The international community has largely cooperated, cracking down on charities suspected to be funneling funds to terrorist cells. Banks have also shown willingness to open for scrutiny accounts of suspected drug traffickers, gunrunners and even rebel groups.
Our problem in this country is that too many of the people tasked to craft laws against money laundering have much to hide in their bank accounts. How can they explain the millions given by drug dealers, smugglers, lobbyists and special interest groups, first during their campaign and then during their stint in Congress? How can they explain the monthly gifts from gambling lords?
With a reporting threshold of P500,000, they would now have to maintain accounts in several banks so their monthly deposit in each bank would not trigger an alarm to the anti-money laundering task force. They may have to open additional accounts for their spouses, mistresses, children and grandchildren.
I share the bitterness of some lawmakers who resent having the FATF dictate Philippine policy. But being a tiny player in the global stage, we have little choice here. The FATF is breathing down our necks particularly because this is one of the countries in Asia where Islamist terrorists are known to operate. By projecting our homegrown terrorists as allies of al-Qaeda, we get (or hope to get) US aid. But there’s no such thing as a free hand-me-down US attack helicopter; we must also clean up our financial system. Oh well, in complying with the requirements, we may even reduce corruption in this country.
There are fears that law enforcers may be given access to bank accounts, which could help rogues in the police force – a number of them of high rank and now occupying key positions – identify ideal victims of ransom kidnapping. The anti-money laundering task force should address these fears.
Some quarters have raised the bogey of capital flight if potential victims of harassment and kidnapping get spooked enough by the AMLA amendments. But where will they take their money when the whole world is tightening the screws? To Baghdad? Syria?
Ladies and gentlemen of Congress, get to work on the AMLA. Time is running out.