money laundering

Buzzer-beater: Congress approves Anti-Money Laundering Act amendments

Ralf Rivas
Buzzer-beater: Congress approves Anti-Money Laundering Act amendments
The Philippine Congress finds middle ground in amending the Anti-Money Laundering Act to avoid being gray-listed by an international watchdog

The Philippine Congress approved on Wednesday, January 20, the amendments to the Anti-Money Laundering Act (AMLA), just over a week before an intergovernmental body is set to review the country’s policies in combating dirty money.

Paris-based watchdog Financial Action Task Force (FATF) had given the Philippine government until February 1 to implement changes to AMLA, in accordance with its standards against money laundering and terrorist financing.

Failure to do so might put the country in the FATF’s gray list, translating into higher interest rates and processing fees, as well as more layers of scrutiny from financial institutions. It would also hinder the country from achieving an “A” credit rating.

The approved bicameral version has:

  • Granted the Anti-Money Laundering Council (AMLC) the power to issue subpoenas and conduct search and seizures of suspicious accounts.
  • Granted AMLC additional power to preserve, manage, or dispose assets pursuant to a freeze order, preservation order, or judgment of forfeiture.
  • Included tax crime as a predicate offense to money laundering and set a threshold to excess of P25 million.
  • Included transactions in excess of P500,000 of all Philippine offshore gaming operators (POGOs) within the purview of AMLA.
  • Included real estate brokers and developers as “covered persons,” but only for single cash transactions involving amounts in excess of P7.5 million, effectively narrowing the burden of reportorial requirements for high-risk transactions.
  • Adopted information security and confidentiality proposals, safeguarding information processed through AMLC and deterring the council’s staff from leaking or misusing information.

The bicameral committee likewise agreed to adopt the Senate proposals related to terror financing, such as AMLC’s power to implement targeted financial sanctions against individuals involved in terror financing. (READ: Money for drugs, human trafficking coursed through PH banks – AMLC)

The amendments would become effective as soon as President Rodrigo Duterte signs and makes public the document. This provision was inserted to meet the deadline imposed by the FATF.

Senator Grace Poe, chairperson of the Senate contingent to the bicameral conference committee, admitted that it was difficult to find middle ground due to “clashing ideals.”

“Bills pertaining to the amendment of the AMLA have always had a difficult time during plenary primarily because of two seemingly clashing ideals: the virtue of adopting provisions recommended by an international body in order to preserve the country’s status as non-haven for money-launderers; and the virtue of preserving our own set of laws and rules away from the influence of these international bodies,” Poe said.

“It’s always been a question of how much or how little we are willing to accommodate, and the price thereof.”

House Speaker Lord Allan Velasco said the amendments would help Filipinos avoid higher costs of financial transactions, including overseas remittances.

“The Philippines cannot afford to be in that list as it would further hurt the economy already struggling from the devastating effects of the COVID-19 pandemic,” Velasco said.

The Philippines was gray-listed in 2000 for failing to address dirty money issues. It was removed from the list in February 2005. – Rappler.com

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Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.