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By Buena Rilyne C. Bernal

AMLC targets state workers’ accounts

Posted on October 12, 2016

THE ANTI-MONEY Laundering Council (AMLC) -- the Philippines’ financial intelligence agency -- has formally asked lawmakers to lift restrictions on bank secrecy of both peso and foreign currency deposits, supporting bills that zeroed in on bank accounts held by public officials and state workers.

The AMLC on Tuesday submitted before the Senate Committee on Banks, Financial Institutions, and Currencies its position paper on at least three bills that sought to allow authorities to open government officials and employees’ bank accounts -- regardless of currency denomination -- without a court order, and irrespective of the nature of the case subject of an investigation.

“There should be no distinction as to what unlawful activity is involved, for as long as the person involved is a government official or employee,” read the position paper, a copy of which was obtained by BusinessWorld.

“[W]e subscribe to the proposal of exempting investigative bodies with appropriate authority or mandate from securing a court order before it can conduct a bank inquiry,” it added.

Under the existing Republic Act 1405, the country’s law on secrecy of bank deposits, bank accounts -- regardless of who owns them -- cannot be examined by authorities without a depositor’s written permission and a court order in cases involving bribery and dereliction of duty of public officials. The other exemptions are cases involving impeachment and where the money deposited is the subject matter of litigation.

While those provisions have guaranteed confidentiality and the integrity of bank accounts maintained within Philippine territory, they have stonewalled investigations related to dirty money in a country whose loopholes were especially exposed after $81 million stolen in one of the world’s biggest cyber heists passed through its banks and casinos.

The AMLC wants those provisions changed, backing up amendments broached by Senator Panfilo M. Lacson, Sr. (Senate Bill 47), Senator Aquilino Pimentel III (Senate Bill 115) and Senator Leila M. De Lima (Senate Bill 196). A fourth bill, Senate Bill 1124, filed by Senator Juan Miguel F. Zubiri, also sought revisions to the bank secrecy law.

The Senate committee on banks began hearings on those legislative proposals yesterday.

Lawyer Ruel M. Bumatay of AMLC, disclaiming the comment as his personal opinion and not the council’s, also told the Senate panel that predicate crimes for bank secrecy law exemptions may also be expanded to include “drug trafficking, fraud, and corruption,” referring to these as crimes “which generate so much dirty money.”

The AMLC said foreign currency accounts of public officials and employees, as well as accounts of their suspected dummies, who may be private individuals should also be exempted.

“Foreign currency accounts remain absolutely confidential under the Republic Act 6426 or the Foreign Currency Deposit Act of the Philippines. Investigations conducted by the AMLC and the Ombudsman have shown that suspected launderers and corrupt officials also use foreign currency accounts to hide their ill-gotten wealth,” the paper reads.

“The AMLC, in the course of its investigations of corruption-related money laundering offenses, has ascertained that ‘dummies’ were often utilized to hide ill-gotten wealth. Since these dummies are mostly not public officials, then secrecy can still be invoked,” it added.

It’s another law R.A. 6426, not the bank secrecy law, that protects the confidentiality of foreign-currency denominated accounts, whose repeal is being sought by the Department of Justice. The Justice department on Aug. 30 also submitted to the Senate its position paper on the three bills. That position paper was signed by Justice Secretary Vitaliano N. Aguirre II.

Both the AMLC and the Justice department said amendments to the bank secrecy law should “complement” proposed revisions to the Anti-Money Laundering Act and the repeal of the law on foreign currency deposits.

Of the three bills, it was Ms. De Lima’s version that explicitly articulated that foreign currency deposits of government officials and workers should be exempted from the cloak of bank secrecy.

“We have no objection to this provision [proposed by De Lima],”the AMLC said in its position paper. -- with MEIC