Senate defers approval of changes to anti-money laundering law

MANILA, Philippines—Pressure from Malacañang and the Anti-Money Laundering Council (Amlac) did not deter the Senate from deferring the approval of proposed amendments to the Anti-Money Laundering Act (AMLA).

Although two of the three proposed amendments are already being discussed in plenary, Senate President Juan Ponce Enrile and Senator Joker Arroyo demanded that Amlac and the Bureau of Internal Revenue explain first why they apparently use tax evasion as an excuse to scrutinize the bank accounts of suspected money launderers.

Through questioning, Enrile was able to elicit an admission from Sen. Teofisto Guingona III that Amlac and the BIR conduct joint efforts to pin down suspected tax evaders.

Enrile, however, questioned whether tax evasion is a predicate crime for money laundering and allows Amlac to participate in these investigations.

Enrile said there exists a memorandum of agreement between Amlac and the BIR “to look into bank accounts of taxpayers.”

“Is tax evasion a predicate crime for money laundering? Why is there a need for a MOA [memorandum of agreement]?” Enrile asked.

He warned that only Congress, through a legislative act, could include tax evasion as a predicate crime that would warrant investigation should the suspicion of money laundering arise.

“It’s a mandate of Congress, not of bureaucrats,” he noted.

Guingona clarified that the MOA allowed the two agencies only to “share financial data.”

The exchange prompted Arroyo to suggest that the Senate scrutinize the proposed amendments “more carefully.”

“The BIR is the agency that collects taxes, audits and conducts investigations. But the AMLA does not say that tax evasion is a predicate crime,” Arroyo noted.

“If the BIR prosecutes individuals for tax evasion and is empowered to obtain any information on business and income of persons subject to investigation with cooperation from Amlac, we have to go over this more carefully,” he said.

Enrile suggested that Internal Revenue Commissioner Kim Henares and Amlac executive director Vicente Aquino first clarify these issues in the Senate before it approves the amendments.

Pressure for the Senate to approve amendments to the AMLA emanates from a demand from the international Financial Action Task Force (FATF) for the Philippines to enact these into law by May.

These include an expansion of the list of predicate crimes for money laundering, the terrorist financing suppression bill and the inclusion of an ex-parte provision in the current AMLA allowing investigators to scrutinize bank deposits without informing a suspected launderer.

The FATF, a creation of the developed countries, will have its plenary session in June. It is threatening to include the Philippines on its blacklist should President Aquino fail to sign the amendments pending in Congress into law by then.

At present, the Philippines is on the FATF’s “dark grey list” for its failure to enact the amendments last December.

Enrile also challenged Guingona to confirm whether other countries in the FATF’s so-called dark grey list are also being pressured to conform to its demands.

“Are we the only one not compliant?” Enrile asked.

Guingona said other countries  “being given opportunity to amend their laws” before the FATF plenary in June include Ecuador, Vietnam, Yemen, Algeria, Angola, Antigua, Argentina, Bangladesh, Brunei, Cambodia, Kyrgystan, Morocco, Tajikistan and Trinidad and Tobago.