AMLA, Bank Secrecy Law for overhaul

The Finance Department will work closely with Congress to speed up the approval of measures that would amend and plug the loopholes in the Anti-Money Laundering Act and the Bank Secrecy Law, Finance Secretary Carlos Dominguez III said Friday.

Dominguez said the DOF and the Bangko Sentral ng Pilipinas have been jointly pushing for these amendments to strengthen the country’s financial system, which is plagued with loopholes that allow travelers to bring unrestricted amounts of foreign currencies into the country, possibly to launder them here, or worse, to fund international criminal syndicates or terrorist networks.

“It is also very likely that the bulk foreign currencies are coming through our financial system through other channels, not only through the ports. They do this because they can,” Dominguez said.

“Our laws have no teeth to investigate and prosecute these activities effectively. We don’t have enough tools to know where all this money is going, without being hamstrung by stringent bank secrecy laws,” he said.

Meanwhile, Senate Blue Ribbon committee chairman Senator Richard Gordon said “somebody must be making money” from Philippine Offshore Gambling Operations, and the “money must be very good.”

READ: Senators slam AMLC inaction

While the operation of these POGOs by Chinese nationals helps generate revenues for the government, they also bring problems such as money laundering, Gordon said.

READ: China ‘invasion’ blamed on soft policy—Gordon

Earlier, the chairman of the Philippine Amusement and Gaming Corp., Andrea Domingo, said POGOs contribute about P20 billion a year in lease payments to the real estate sector. The industry also generates an estimated P24 billion in income taxes annually and P1.25 billion in value-added tax monthly from foreign workers who purchase around P12.5 billion a month.

But Gordon also warned the huge money entering the country could also pose a security threat to the country.

Dominguez said the AMLA, enacted in 2001, remained a weak tool against money laundering and other unlawful activities, especially because tax evasion and other financial crimes were not among the predicate offenses listed under the law that would allow the Anti-Money Laundering Council to examine bank accounts after securing a court order.

“This leaves us powerless in going after tax evaders and other criminals using funds for other illegal activities,” Dominguez said.

He noted that as early as 2016, the DOF has called on the Congress to pass amendments to Republic Act (RA) No. 1405, or the Bank Secrecy Law, to enable the government “to penetrate the wall of confidentiality used to conceal ill-gotten money by lifting the bank secrecy rules for suspected criminal cases.”

The DOF again tried to include the lifting of bank secrecy in the tax amnesty bill, but this was excluded by the Congress in the final version of the measure.

Without the lifting of RA 1405 in the Congress-approved measure, President Duterte vetoed the grant of a general tax amnesty when he signed the Tax Amnesty Act into law in February last year, he said.

“Offering a general amnesty must come with the ability to verify whether those who availed of it are not repeating the same violations when evidence points to the likelihood that they are doing so,” Dominguez said.

“Now more than ever, we are ready to work with the legislature to advocate again for congressional approval of this crucial measure. We will likewise support the swift passage into law of the amendments to the AMLA to ensure that the Philippines will not be used as a money-laundering site for the proceeds of any unlawful activity,” he added.

Dominguez earlier ordered the Bureau of Customs to work with AMLC and other government agencies to investigate attempts by suspected syndicates to bring in large sums of foreign currency here.

He issued the directive after Customs Commissioner Rey Leonardo Guerrero reported to him last Jan. 29 about several attempts of travelers arriving at the Ninoy Aquino International Airport to sneak in large amounts of US dollars and other foreign currency stashed in suitcases.

Last week, President Duterte said he wanted a “vigorous” investigation by the Bureau of Customs and Anti-Money Laundering Council of the incidents.

Guerrero said that last year, an estimated $370 million or around P18.74 billion was brought into the country by two groups, identified in his report as the “Rodriguez” and the “Chinese” groups.

The BOC chief recommended to Dominguez the creation of an interagency body to keep tabs on the inflow of foreign currency into the country via the country’s ports of entry, and to recommend measures to deter the use of these funds for illegal activities.

Guerrero said the bureau learned that foreign currencies brought in by the Rodriguez Group through the NAIA amounted to about $200.24 million or around P10.18 billion; while the Chinese group was able to sneak in $167.97 million, equivalent to about P8.54 billion.

Guerrero said the BOC also informed members of the Congress about this concern.

Gordon mentioned the two People’s Liberation Army IDs found in possession of Yang Chao Wen, 32, and Liang Yuan Wu, 29, arrested in Makati for the murder of Yin Jian Tao, 33, who worked in a POGO.

Senator Panfilo Lacson earlier told reporters in an ambush interview he was informed that around 2,000 to 3000 PLA members may have entered the country as tourists or as POGO workers.

Lacson, chairman of the committee on national defense and security, also said the PLAs are allegedly on an “immersion mission.” But Lacson had repeatedly noted that this report still needs to be validated, describing his source as “fairly reliable.”

Senate Minority Leader Franklin Drilon stood pat on his stand that POGO operations should be stopped, saying the P8 billion collected from their fees and licenses is not worth the rising social problems and gambling-related crimes brought about by their presence.

“For P8 billion that you get from fees, you are saying that they should be here? That statement, I must say, is a stupid statement. As long as there is money, all these evil things we tolerate?” Drilon said, addressing Pagcor officials.

Police Lt. Gen. Guillermo Eleazar, Philippine National Police deputy chief of operations, said a spike in the unber of crimes last year was related to the increased arrivals of Chinese nationals.

While accepting that the influx of Chinese nationals coming to the Philippines has an economic benefit, Eleazar expressed concern over their impact on law enforcement.

READ: POGO workers laundered P10 billion in 'dirty money,' Gordon says

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Topics: Department of Finance , Anti-Money Laundering Act , Bank Secrecy Law , Carlos Dominguez III
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