POSTSCRIPT / February 11, 2003 / Tuesday


Philippine STAR Columnist

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Senate under the gun on money-launder bill

NO CHOICE: We often wonder why we allow foreign entities to pressure us into doing things. In the case of anti-money laundering bills, however, we seem to have no choice considering the big stick poised by the Financial Action Task Force, a quasi-official global enforcer that monitors movement of suspected dirty money.

Money laundering is the washing through the banking system of illicit funds to make them look legit. Any country that does not cooperate in curbing it lands on the FATF watch list and is given a hard time in the processing of its financial transactions.

Some Filipinos abroad have reported unusual difficulties in remitting dollars back home. President Arroyo told us last Saturday of a Filipina who was given the run-around in a London bank when she presented her Philippine passport.

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FATF DEMANDS: Desired amendments to the anti-money laundering law (RA 9160) have to be enacted by tomorrow to avoid sanctions by the FATF, a group of 29 countries and two international organizations that examine money laundering techniques and move to combat the problem worldwide.

The FATF wants (1) the P4-million threshold amount for suspicious transactions in RA 9160 reduced to P500,000, and (2) the court order requirement lifted on transactions considered to be suspicious. The threshold is the amount level at which scrutiny of the fund sourcing is deemed justified.

Not only is time running out on Congress to do its job. Overseas Filipino workers are also running out of patience with dilly-dallying lawmakers who appear reluctant to pass a law that could open their own dark banking secrets and that of their benefactors.

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OFWs COMPLAIN: Engineer Noel Josue, executive director of Kaibigan ng OFWs, and other leaders of OFW groups have expressed fear that foreign exchange remittances of their families would be delayed or cost a lot more to process should the Philippines fails to meet the standards set by the FATF.

“We are worried that OFWs’ families would be penalized should Congress fail to enact the AMLA amendments,” said engineer Nelson Ramirez of United Filipino Seafarers.

Mildred Yamzon of Women in Development Foundation, on the other hand, said “In case our remittances are delayed, we will be forced to borrow money at usurious rates to meet payments for house, rent, tuition, and other necessities.”

As of yesterday, two days from the Wednesday deadline, no compromise bill was yet in sight.

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SENATORS WATCHED: The OFW leaders are watching 11 senators who had voted for a P2-million threshold for suspicious transactions. This is way above the P500,000 recommended by the FATF. In the US, the threshold has long been $10,000 (roughly P500,000).

“We are warning the senators,” Josue said. “They have no business staying in the Senate if they cannot protect the welfare of overseas Filipino workers and their families.”

Speaker Jose de Venecia Jr. said the House can pass the bill on second up to third and final reading by last night, so a bicameral committee can smooth out any conflicting provisions in the Senate and the House versions tomorrow. If ratified later in the day, President Arroyo can sign the amendments into law by Wednesday.

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HOUSE COPY PREFERRED: Majority leader Neptali M. Gonzales II said the delay is due not only to lack of quorum but also because of objections by many members.

He said the FATF prefers the House version because it complies with its strict requirements, unlike the Senate version that sets P2 million as the threshold for covered transactions.

Tarlac Rep. Jesli A. Lapus suggested that Finance Secretary Camacho and Bangko Sentral Gov. Rafael Buenaventura plead with the FATF for a deadline extension to allow Congress to debate the bill more exhaustively and avoid being accused of passing it with undue haste.

Ilocos Norte Rep. Imee R. Marcos prodded De Venecia to use his authority to compel attendance and get the amendatory bill, as well as the absentee voting bill, passed.

“We don’t have to follow everything the FATF wants us to, but we can’t escape the fact that it’s very influential.” Marcos said. “It’s already meddling in our banking secrecy law, and if we don’t comply we are greatly affected as well. So, let’s at least do the minimum compliance and get done with it.”

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CPBD WARNING: The Congressional Planning and Budgets Department of the House has warned that failure to comply with the strict requirements of the FATF would have tremendous risks and economic and social costs.

The Philippines is now ranked 9th on the list of non-cooperative countries and territories, along with Cook Islands, Egypt, Grenada, Guatemala, Myanmar, Nauru, Nigeria, St. Vincent and Grenadines and Ukraine.

In a policy advisory to legislators, the CPBD said the Philippines runs the risk of being overcharged for services by foreign banks due to the rigorous process of profiling transactions, including remittances of overseas Filipino workers. From the current $2 to $7 on electronic fund transfers, the fee could go to a high of $30 to $40 per transaction.

The trade sector faces losing $5,875 million daily or roughly $2.6 billion a year as a result of delayed export and import deliveries caused by stringent processing rules. The impact of countermeasures on trade is huge considering that more that half of the country’s foreign trade is with the US, Japan, Hong Kong, Singapore which are FATF members.

The CPBD said access to official development assistance and loans could be hampered, banking relationships with other countries undermined, further depreciation of the peso expected, and the transfer of foreign currencies delayed by stringent disclosure and information requirements of international banks.

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(First published in the Philippine STAR of February 11, 2003)

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