By Angie M. Rosales
The Daily Tribune

The Senate approved yesterday one of three bills seeking to amend the Anti-Money Laundering Act (AMLA) which granted the Anti-Money Laundering Council (AMLC) authority to inquire “ex parte” or without a court order into bank accounts and investments of suspected money launderers and likewise allows it to pry into related accounts.

Senators are now crossing their fingers that the approved bill will be sufficient to meet a reported “requirement” imposed by the Europe-based Financial Action Task Force (FATF) on amendments to the AMLA to spare the country from landing in the body’s “blacklist” of dirty money havens.

Senators said they are hoping the bill would represent “substantial compliance” even as there was no assurance that such will be acceptable to the FATF.

Just in time for Congress’ adjournment sine die, the upper chamber ratified Senate bill 3009 which was certified urgent by Malacanang immediately after the bicameral conference committee approved yesterday morning the consolidated version of the bill.

President Aquino’s spokesman Edwin Lacierda said the Office of the President transmitted to the Senate at 10 a.m. yesterday a copy of Aquino’s certification of immediate enactment of the Anti-Terrorism Financing Bill or Senate bill 3127 which criminalizes terrorist financing to hurdle third reading and the upper chamber’s version is expected to be adopted by the House in separate plenary session to remove the need to go into another bicameral committee proceedings.

The third bill, SB 3124, expanding the scope of the AMLC or covered institutions and persons and so-called predicate crimes, was set aside to be taken up anew when Congress reconvenes regular sessions in July.

The AMLA places banks, financial institutions, corporations and insurance companies under the jurisdiction of the AMLC and under the called amendment, casinos, dealers of precious metals and a few other entities are proposed to be covered as well.

“We do hope that we are able to substantially align our financial system to the other systems worldwide,” Drilon said, pointing out that the amendment to the terrorism financing bill would add teeth to the AMLC.

“The third measure we could not act upon and this is the bill which would expand the entities covered by the anti-money laundering act. This one (SB 3124) is also required by the FATF, which we could not pass. We are hopeful that the actions taken would be in substantial compliance with the requirements. But we do not know what actually will be the decision when the FATF convenes by the third week of June. If not, then we’re falling into the category which means our financial transactions will be subjected to an enhanced examination and the most vulnerable are (remittances of) overseas Filipino workers,” Drilon said.

“Our AMLC will appeal basically to state that (the Senate) ran out of time, because the last four months were devoted to the impeachment of the Chief Justice and we did not have much time to look into these measures. I do not know if that explanation will be accepted. I hope it will be accepted. Hopefully, we will be given until October this year which will be the next review to come out with the third measure,” Drilon, chairman of the Senate committee on finance, added.

Senate President Juan Ponce Enrile remained optimistic that the FATF would take cognizance of their efforts to change the country’s banking systems, especially on matters attending to anti-money laundering and terrorist financing.

“We will likely be able to pass (into law) the second bill,” he said.

“The main bill requires a revision of the AMLA and there should be a lot of studies needed for it. The Anti-Terrorism Financing (bill), was passed by the Senate. The Unilateral Application for Examination, the bill which removes the need to inform a depositor of an AMLC investigation, was passed. It is true that launderers, with the current requirement for them to be informed of an investigation, will only resort to removing their money from their accounts. We understood this but a certification of Malacañang will be needed because we have no more time to comply with the three-day rule,” he explained.

Sen. Joker Arroyo was the lone senator who voted against the ratification of SB 3009.

“I would like to cast a negative vote not because the bill is bad. I think the bill is good and I would myself say that the participants in the framing of this bill have to be commended especially Guingona, the sponsor, (Sen. Sergio) Osmena (III) – the chair of the committee on banks. Everybody I think proceeded in good faith,” he said.

“However, I am not comfortable with the wording that it gives ample protection to innocent third parties. If because of that, the inadequacy of protection of third parties that I cast for a negative vote,” he said on the floor.

Arroyo also cited the issue of a possible breach of privacy laws although the sponsor of the measures, Guingona, was quick to point out that SB 3009 also imposed Constitutional protections “to balance the need to suppress criminality and protect the rights of individuals by imposing the need to establish probable cause before an inquiry order can be issued by the SC or the Court of Appeals.”

He added that under the bill, the court should act on a petition to freeze an account within 24 hours from the filing of the petition. At the same time, no court shall issue a temporary restraining order or a writ of injunction against any freeze order, except the Supreme Court, as provided in the approved bill.

Guingona also said the bill allows an ex parte inquiry into the accounts of persons “when there is probable cause that the funds therein are related to money laundering or an unlawful activity or a predicate crime.

“This is necessary in the light of a lamentable decision of our Supreme Court which ruled that before the Anti-Money Laundering Council can look into an account, it would have to inform the concerned person: a de parte inquiry. Once informed, many have resorted to emptying out their bank accounts before the government can inquire into them. Logic and necessity demand that we allow for an ex parte inquiry,” he said.

The approved version crafted by the bicameral committee dropped the Sandiganbayan and retained the Court of Appeals as the only court that could issue freeze orders on suspicious accounts.

Guingona added that the bicameral panel also adopted an amendment empowering the AMLC to inquire not just into the main account but also into related accounts, defined as “shall refer to accounts, the funds and sources of which originated from and/or are materially linked to the monetary instrument(s) or property(ies) subject of the freeze order(s).”

“As the chairperson of an investigative committee, the Senate Blue Ribbon Committee, I have witnessed the usual scheme wherein funds that were unlawfully acquired or stolen from government are moved from one account to another, with the clear purpose of keeping it away from the reach of the authorities. People have laundered funds from their accounts to the accounts of their wives, brothers-in-law, drivers, and every conceivable person within their network,” Guingona said.

As for the other measure, passed on third and final reading, allowing regulators to crack down on suspected terrorist bank accounts, Guingona explained that the bill defines terrorist financing as “any person who directly or indirectly, willfully and unlawfully provides, collects or uses property or funds, or makes available property, funds financial services or other related services” with the intention of supporting terrorist activities.

In addition, he said the bill would criminalize the act of financing terrorist activities as “an independent punishable offense.”

“Approval of this important measure is a positive step towards thwarting terrorism by slashing its ultimate lifeline – financing. Criminalizing the act of terrorist financing is in compliance with our international commitments, in particular, the United Nations International Convention for the Suppression of Terrorist Financing, which the Senate concurred with on January 7, 2004,” Guingona said.

He added that the approved AMLA amendment also allowed government to run after those involved in international terrorist-financing activities, citing its provision which states that the Philippines may, “subject to the principle of reciprocity, consider the International Convention for the Suppression of the Financing of Terrorism as a legal basis for requesting or granting extradition in respect of the offenses set forth under the Act.

“Unlike before when the government found it difficult to run after internationally funded terrorist activities, the government can now take action and request for foreign assistance, such as in extradition of suspects,” the senator said.

SB 3127 will help curb the spread of terrorism by paralyzing the very lifeline of unscrupulous groups and individuals: criminalizing terrorist financing as it penalizes any person who deals with property or funds owned or controlled by terrorist organizations, or those that have been seized and sequestered pursuant to RA 9372 or the Human Security Act.

It also mandates the Anti-Money Laundering Council to investigate any property or funds that are related to financing of terrorism or acts of terrorism.

“SB 3127 criminalizes terrorist financing as an offense separate from the crime of terrorism. Mere financing, despite the non-accomplishment of terrorist acts will be penalized,” Guingona said.

He added that the bill also penalizes any person who deals with properties or funds owned or controlled by terrorist organizations or those that have been seized and sequestered under the Human Security Act.

“This is important since the bill mandates the Philippines’ Anti-Money Laundering Council to investigate any property or funds that could be related to financing terrorist elements and activities,” Guingona stressed.

The approved measure penalizes any person who assists the principal of a crime by concealing or destroying the effects of the crime, or by harboring or assisting the escape of criminals. The penalty for these offenses is two degrees lower than that prescribed for the principals of terror financing.

“Since terrorism essentially depends on the financing it may obtain, it is a matter of grave and urgent concern to any reasonable government to criminalize the financing of terrorism. To financially paralyze any terrorist groups is a serious endeavor towards the more challenging goal of fully eliminating terrorism,” Guingona said.

The good-governance advocate stressed that terrorism was a threat against the peace and stability of the community of nations.

“As a result, the obligation to eliminate this threat is a cooperative effort among various nations. A country perceived to be a haven of terrorists or perceived to have insufficient mechanisms to address terrorism faces several challenges that affect its development, economic integrity, and financial viability,” he added.

Guingona noted that a strong anti-money laundering regime was a step towards the end of corruption.

“It also creates a stable financial system: one that is bolstered by funds and investments from legitimate sources. There is no logic in the belief that a strong anti-money laundering regime will only encourage people to transfer their funds to other territories. I believe that when one earns legitimately, one is not afraid of a strong anti-money laundering regime. One would even welcome it,” he said.

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