PROPOSED AMENDMENTS to the Anti-Money Laundering Act (AMLA) that will prevent the Philippines from being grey listed, as proposed in the Senate, may “over-regulate” the real estate industry, stakeholders said.

Senate Bill No. 1412, which will amend Republic Act No. 9160, proposes to include real estate developers and brokers among covered persons, and single cash transactions amounting to more than P1 million among the covered transactions that must be reported to the Anti-Money Laundering Council (AMLC).

“We register our objection to the proposed amendments to the AMLA, particularly within the context of the growing housing backlog, existing constraints to production, which refutes the necessity to regulate some more an already overly-regulated sector,” Christopher Ryan T. Tan of the Organization of Socialized and Economic Housing Developers of the Philippines, Inc. (OSHDP) said in an online hearing on Wednesday.

Mr. Tan spoke before the Senate Committee on Banks and Financial Intermediaries, tackling measures strengthening the AMLA in compliance with the recommendations of the Financial Action Task Force (FATF).

The FATF had earlier given the government one year until this month to address gaps in its AML laws and anti-terrorism measures. However, this was extended until February due to the pandemic.

Mr. Tan argued that FATF Recommendation 22 specifies real estate agents, rather than developers and brokers. He added the P1-million threshold is also not provided by the FATF and was lower than the P3 million they had proposed.

“OSHDP specifically requested to exclude low-cost economic housing and socialized housing from covered persons and transactions — that would mean price points above P3 million. The P1-million transaction is not something we agreed to,” he said.

AMLC Executive Director Mel Georgie B. Racela said in the same hearing that the recommendation took into account discussions with social housing representatives.

“Because it will affect the social housing initiatives and project of the government, we were able to agree that the P1-million cash transaction will not be covered [and] more than P1 million will be covered…,” he said.

He added that inclusion of the real estate industry as covered persons was considered as they confirmed that the sector is being used to launder funds.

Senator Grace S. Poe-Llamanzares, who chairs the panel, and Senate Minority Leader Franklin M. Drilon proposed the mandatory reporting of covered transactions be placed under the Registry of Deeds instead of developers and brokers. The senators also proposed to increase the threshold to P3 million.

The Professional Regulation Commission reported there are currently more than 11,000 real estate salespersons and about 31,000 brokers.

Mr. Drilon also said the government should amend the AMLA according to interest of the country versus simply complying with the recommendations of the FATF.

“Let us pass what we believe is reasonable. What we believe is consistent with our national interest and submit it to FATF and debate to them that this is compliant with regulations. These brokers agents, to me, it is unreasonable to require 41,000,” he said.

The bill also proposes allowing the AMLC to investigate suspicious transactions, upon its own determination; interview witnesses, conduct surveillance undercover investigations, and court-approved searches and seizures.

The council may also subpoena persons and documents relevant to the investigation as well as implement targeted financial sanctions, such as freezing assets either directly or indirectly owned by individuals identified by the United Nations Security Council. — Charmaine A. Tadalan

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