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Bank secrecy law repeal considered

THE Senate is headed toward relaxing or repealing the country’s law on bank secrecy as a step to counter terrorism and corruption, said Senator Francis Escudero.

Once amendments to the bank secrecy or the mandatory waiver for public officials are passed, bank records automatically become accessible to the Anti-Money Laundering Council, Bureau of Internal Revenue, the Securities and Exchange Commission and the Ombudsman.

Bangko Sentral ng Pilipinas Governor Amando Tetangco has been asking Congress to relax the Bank Secrecy Law so that the BSP can further strengthen its enforcement powers.    

“This means that the BSP is asking for authority from Congress to be able to look into bank accounts in the course of bank examination, when there is a reasonable ground to believe the fraud, unlawful activity, or irregularity has been committed or is being committed,” Tetangco said.

He said the concern he raised involved the Philippines being one of the very few countries that have bank secrecy laws and that the regulator is not exempted from the Bank Secrecy Law.

“The concern is really that since many countries have lifted their bank secrecy regulations, the Philippines might attract dirty money or laundered money because of the existence of bank secrecy laws here,” he warned.

Escudero said that since some Senate proposals may exclude government officials, they will however compel public officials to submit a waiver in favor of the Ombudsman on the secrecy of their bank deposits, along with their sworn Statements of Assets, Liabilities and Net Worth. 

Such move is covered in Escudero’s proposed Senate Bill No. 80.

“Now if they refuse to sign a waiver, then they don’t have a business being in government. For me, anybody who is in the government has no right to say it is a secret,” said Escudero.

Escudero said there are two ways of doing it in so far as government officials are concerned.

“One way is to remove government officials from the coverage of RA 1405, while the other is to comply with the provisions of 1405 by requiring all public officials and employees to submit a waiver with their SALN in favor of the AMLC, the BIR and the Ombudsman to look into their deposits,” Escudero said.

This would not require changes to the law but would simply require public officials to submit a waiver together with his or her SALN.

The Senate Committee on Banks, Financial Institutions and Currencies, which Escudero chairs, heard today several legislative proposals to amend the Bank Secrecy Law. 

There have been talks of changing the Bank Secrecy Law to allow authorities to probe highly suspicious bank accounts, especially after $81-million hacking of the Bangladesh account with the US Federal Reserve early this year that ended up in a Philippine bank.

The Philippines and Lebanon are the only remaining countries with stringent laws on bank secrecy in the world.

RA 1405 prohibits disclosure of bank deposits, either held by public officials or private individuals, with any banking institution.

Section 2 of the law states that all deposits of whatever nature in banks or banking institutions in the country are “considered as absolutely confidential in nature and may not be examined, inquired or looked into by any person, government official, bureau or office, except upon written permission of the depositor, or in cases of impeachment, or upon order of a competent court in cases of bribery or dereliction of duty of public officials, or in cases where the money deposited or invested is the subject matter of the litigation.”

Since 2010, the veteran lawmaker has been submitting, together with his SALN, a written waiver on the secrecy of his bank deposits, which he files every year with the Office of the Ombudsman.

In the case of private individuals, removal of bank confidentiality will apply under certain circumstances, he said.

Topics: Bank secrecy law , counter terrorism , corruption , Senate , Senator Francis Escudero , Bangko Sentral ng Pilipinas , Governor Amando Tetangco
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