If sanctions get slapped on us due to money laundering, we’ll all suffer big-time!

It’s about time we stopped farting around about it. It’s fortunate that a group from the Financial Action Task Force (FATF) came to Manila to explain what’s needed to remedy our grossly inadequate and stupidly cross-eyed "Anti-Money Laundering Law" which protects crooks, terrorists, and swindlers, instead of the public.

I don’t know anybody in the FATF group nor anyone in the Paris headquarters, but I thank this bunch for taking the time to come here and "enlighten" us on what we’re doing wrong.

Will we be able to get our act together and amend our AMLA in time to head off the sanctions which will, as surely as the sun rises, be slapped on us come March 15 – or Saturday next week? Not if our selfish politicians hang tough and keep on window-dressing this anomaly as a "sovereignty" issue, or a "constitutional" infringement, or bombastically proclaim they are hell-bent on protecting the "holy sanctity of bank secrecy". Sure, who wants his bank secrets to be published? On the other hand, there are bank secrets that must be investigated for the safety and welfare of our nation.

Our so-called solons will have to understand particularly some of our senators who have the sanctimonious instincts of the Spanish Inquisition – that the FATF visitors are not here to defend their position, bully us, or demand our compliance. Hopefully, they’ll frankly tell us how to cure the problem – and we’ll listen to them and do something about it.

How many times have our media been frothing at the mouth about frauds and scams (like the current scandal of the latest pyramid scam), kidnappings, terrorism, and corruption? Other countries have found that financial investigations are a valuable tool in fighting these crimes – yet, instead of adopting this tool, a majority of our senators and some of our congressmen smugly pontificated that it would be "unconstitutional" and destructive of bank secrecy.

Senator Ramon "Jun" Magsaysay fought the good fight when he tried to get his peers to pass a sober and effective "Anti-Money Laundering" amendment of the existing but defective law. The draft had been carefully studied by his committee, but this move was defeated in the Senate by one vote. I trust that, after talking things out with our FATF friends, the senators who turned thumbs down on the proposals will come to their senses – and do what’s right.

If they don’t, then the people who were deluded into electing them into office will have to brace themselves to feel the pain.

* * *

An old and trusted friend of mine, a Brit, who’s the leading "anti-money laundering" expert in Hong Kong, sent me an e-mail a few days ago which is very pertinent and to the point. He wrote: "I know very well it is not my place to comment on the internal policies of the Philippines and under normal circumstances I wouldn’t do so. If nothing else, I am mindful of the advice I was given the first time I visited the country: ‘Don’t get involved in local politics, that’s how Magellan got killed’."

If I recall right, I might even have been the one who gave him that advice.

"From a purely personal point of view," my expert noted, "sanctions against the Philippines would actually be good for me; there is a good chance I might pick up some consultancy work out of it. I know the situation for the ordinary Filipino, however, will be quite different."

"News of the first problems has already been reported, and this is also having an impact on the exchange rate, but no one will ever know the opportunity cost of what is being lost."

For example, he pointed out, "a friend of mine is interested in a small business – a diving resort – in the Philippines. At lunch the other day, sadly, I had to advise him not to do so, because of the very real possibility that the FATF will impose sanctions next week."

"Whether their arrogance is more damaging than their ignorance, I am not sure, but I am appalled at the reckless indifference of some of your elected senators. The feebleness of the arguments I have read in the Philippine newspapers last week has been, quite frankly, unbelievable. I am a great believer in a free press but some of the opinions and reports I have read make me despair."

Some people, he groaned, who obviously fail to understand the problem, have been quoted in Philippine newspapers as saying that "sanctions will not affect Filipinos abroad because there are other means of remitting money without going through banks." This, my British friend underscored, is nonsense.

"These people should perhaps look at the ‘FATF Special Recommendations on Terrorist Financing,’ as well as other documents released by the FATF on 14 February. Just last week, in Uganda, concerns about possible money laundering prompted Barclays Bank to stop any forex (foreign exchange) bureaux and money remitters from doing telegraphic transfers."

Let me remind our readers that my foreign expert has no axe to grind – in fact, as he’s already stressed, if "sanctions" are imposed on us this would be good for his own security and consultancy, or "risks" business. But he sincerely hopes we won’t stumble terribly in this crucial matter.

For instance, Bankers Association of the Philippines’ President Cesar Virata has already warned that the $7 billion worth of dollar remittances of overseas Filipino workers would be the first to be affected if the 28 member-nations of the FATF (spearheaded, by the way, by the United States – which won’t hesitate to crack down on us, I kid thee not) impose sanctions next week.

Some calculations I already have in hand say these coming sanctions could mean a loss in foreign remittances of more than US$2 billion a year!

And we don’t take this threat seriously?

* * *

I really don’t understand why our solons should be so squeamish. An honest-to-goodness anti-money-laundering statute is essential to effective law enforcement. The banks in Switzerland, the holy of holies of bank secrecy and the homeland of the "numbered bank account", have no problem reporting suspicious transactions to the police. Nor do the banks in Hong Kong, Singapore, and just any other civilized city or country balk at such essential disclosure.

In our Senate version of the AMLA, on the other hand, our senators limit the number of predicate offenses to only three, then wonder why the FATF and the international banking world laughs at us. In Hong Kong, to cite just one example, any serious criminal offense can be a money-laundering predicate offense. In the US, there are 161 "Specified Unlawful Activities" – the proceeds of political corruption included. (Ay, possibly, there’s the rub).

Whether we like it or not, we live in an increasingly international world, and threats to our security – such as terrorism and crime – have to be addressed internationally. Our politicians look ridiculous trying to point the finger of blame at Finance Secretary Lito Camacho (one of my pet targets, in other matters), or Bangko Sentral ng Pilipinas Governor Rafael Buenaventura, for their kuno failure to defend Congress’s tattered version of AMLA before the FATF. This attempt to pass off the blame simply beggars belief. Our senators (the House version was a bit better) simply forced through a bulok, perhaps deliberately toothless version of what they tried to pass off as "anti money-laundering" – that’s it. Let them repair it, pronto. It may even be too late.

When the sanctions bite, I hope they’ll get a public spanking.

* * *

How will sanctions affect us Filipinos in dealing with foreign banks? We’ll become pariahs.

If you put yourself in the shoes of a foreign bank, the results of simple cost-benefit analysis may be frightening. The Philippines, for all our conceit, is not a major market or a critically important trading partner, yet – to the foreign banks – if the money coming out of our country exposes them to potential money-laundering risks, and the money sent in to the Philippines in remittances from OFWs, on which they don’t make much profit anyway, also exposes them – they’ll stop, or delay, handling these remittances.

After all, they’ll say: "Is it worth the grief?"

And when our OFWs can’t send their money home – those dollars, dinars, rials, and other currencies so vital to keeping their families back home alive, or up-to-date with the rent and the tuition – our politicians will eventually be faced with a "revolt" of the OFWs – who, by now, have gotten themselves the vote.

Don’t believe that bullshit about other "means" of getting OFW money home – the "door-to-door" business can only handle a minuscule proportion of the $7 billion.

If you ask me, for all the jingoism we’ve been exhibiting in our own media, the FATF has not been trying to push us around. It’s been bending over backwards (witness the current visiting "mission") to give the Philippines every opportunity to do ourselves the favor of enacting a law capable of dealing with what I‘d like to call "The Proceeds of Crime" in our country.

It’s bad enough that 1.4 million of our OFWs now find themselves in the "combat zone", with a war in the Gulf coming. They’re willing, bravely, to take the risk involved for the sake of earning a livelihood for themselves and their families. But if our politicians, like some self-righteous, or worse, pig-headed senators, take away from them, to boot, the capability of sending these earnings "home" – what for, then, are they risking their lives?

That’s something to ponder. Today, before it’s too late. Not later.

* * *

The stunning capture of the Number 3 leader of al-Qaeda in the Pakistani city of Peshawar last Saturday shows that the fight against terrorism has begun to garner tangible results. The Pakistani security police are rightly getting the credit for this master-stroke of detection and arrest, but we’re certain that American agents gave them a powerful "assist".

In the old days, we journalists covering Pakistan’s Northwest – from our main base in Rawalpindi (near the capital of Islamabad) – knew Peshawar very well. I used to stay in Green’s hotel in Peshawar, although I preferred the Flashman’s in ‘Pindi because the Green Hotel was so primitively British-colonial style (dating back, without renovation to the time of Rudyard Kipling), with a fireplace in the anteroom but none in the freezing-cold bedroom. On the other hand, Peshawar was full of fierce and colorful Pushtuns (Pathans), those tribal warriors who were the "rulers" of the Northwest, and their tribal territory ran all the way up through the Khyber Pass (Landi Khotal) to half of Afghanistan.

The Pushtuns were, indeed, the backbone of the Taliban – no wonder that terrorist chieftain, Khalid Shaikh Mohammed, known as "the man of 27 aliases", felt safe there. Last Saturday, thankfully, he was tracked down and nabbed, along with three others.

Khalid, who was constantly at Osama bin Laden’s elbow, and referred to by British journalist Mark Huband as "the CEO of al-Qaeda", is now in American hands and is being grilled intensively about his pivotal role in planning the 9/11 attacks on the Twin Towers and the Pentagon.

What should cheer us up is that he’s been caught, at last. What should dismay us is the proven fact he had spent so much time in the Philippines organizing terrorist cells with his nephew Ramzi Yousef. (Remember that name?) As a matter of fact, it was this terrorist CEO Khalid who hatched the Bojinka Plot together with Ramzi Yousef (you know, the plan to hi-jack US commercial airliners over the Pacific and blow them up, or crash a light plane, loaded with explosives, into the Pentagon. Well, whaddya know. Khalid finally refined this, it seems, into hijacking fully-fueled United Airlines and American Airlines passenger jets (no need for additional bombs or explosives) and crashing them with full force into the World Trade Center and the Pentagon.

In an act of prescience, journalist Huband – along with inputs by Farhan Bokhari in Karachi and Islamabad, Charles Clover in Kuwait City. Roel Landigan in Manila, and Victoria Burnett in Kabul – put together an article which traced this fellow Khalid "from a suburb of Kuwait City to college in North Carolina to the alleys of Peshawar…"

The piece appeared in the February 16 FT Weekend edition of the Financial Times and was subheaded: " . . . He is the man intelligence officers from Manila to Washington want to track down."

The article recounts how Yousef (after he tried to bomb the World Trade Center in New York earlier) looked for his "uncle, Zahid al-Sheikh, brother of Yousef’s mother and of none other than Khalid Shaikh Mohammed".

In Karachi, Yousef "appears to have teamed up with the man who was to become his patron . . . the man was known by a variety of names, including Munir Ibrahim Ahmed, Munir Madul and Abdul Magid Madni. He was, of course, Khalid Shaikh Mohammed".

Yousef’s and his terrorist associate and fellow bomb-maker Hakim Murad’s activities in Manila were financed by Khalid, it seems, through a company called Konsonjaya, an import-export operation dealing in Sudanese honey and other commodities "and based in the Malaysian capital Kuala Lumpur. Among the directors was the operational head of Jemaah Islamiyah, the south-east Asian regional Islamist network, a man called Riduan Isammudin but whom the intelligence world knows better as ‘Hambali’."

See the link? This fascinating article, written over two weeks ago, traces all the connections – including those of Fathur al-Ghozi, the author of those terrible December 30 "Rizal Day" bombings in Metro Manila, the devastation of the LRT train and the bus in Quezon City. (There’s much more in the article’s revelations, but space doesn’t permit – so please check it out in that FT back issue.)

And we still weep over the offensive launched against Moro rebels down south with strong ties to the Jemaah Islamiyah and visible contacts with al-Qaeda? Give us a break. We’re a Republic fighting for its very life – yet we’re getting sniping from our own side.