Monday, November 5, 2012

Money laundering


BY AMADO P. MACASAET
MALAYA
‘By refusing to make good its commitment to cooperate in the exchange of data with members of the FATF, the Senate practically helped make this country a possible haven for laundered money.’
By its refusal to honor a firm political commitment in 2010 to remedy the deficiencies in the Philippine effort to combat money laundering, the country has been placed on a so-called gray list.
The Philippines is now being constantly monitored by the Paris-based Financial Action Task Force (FATF) as a possible haven for stolen or dirty money coming from drugs, smuggling, kidnapping for ransom and other illegal sources including graft and corruption.
The Senate failed to make good the Philippine commitment obviously because it found itself in quandary between compliance and possible violation of the bank secrecy law.
Under the FATF regulations, member countries may exchange information about suspected laundered money without court permission. Giving away information about deposits without a court order or consent of the depositor is considered a criminal act.
But how else are we going to catch the thieves? As it is, the courts in the Philippines have not exactly been cooperative in pursuing anti-money laundering. We remember the case of some officials of Fraport, the German partner in the construction of the failed NAIA Terminal III.
The anti-money laundering council filed an ex parte petition with the court to examine the deposits of the Germans and the wife of an official of Philippine International Air Transport Corp. (Piatco).
The court invalidated the petition because the respondents were not informed. That, according to the court, does not sit with law. The legal doctrine of “dura lex, sed lex”, the law is hard but it is the law, was clearly applied in the case.
A more noble objective of preventing the country from being a haven for ill-gotten, stolen, dirty money was crushed by the court. Upholding a legal maxim put the country in grave danger.
We look at the case simply from common sense. If the respondents in an ex parte case – respondents suspected of having deposited stolen money – were informed of the council’s intention to examine their deposits, the first move they would take is move the deposit elsewhere.
The court put to waste what could have been years of painstaking intelligence work to trace iII-gotten money.
By refusing to make good its commitment to cooperate in the exchange of data with members of the FATF, the Senate practically helped make this country a possible haven for laundered money.
The danger of this proposition, obviously taken by the Senate in the name of the majesty of the law, is making Philippine banks a depository of money for terrorism.
There is so much illegal money that comes from the smuggling of cigarettes in countries that raise taxes to make smuggling a profitable proposition.
The Philippines is a clear candidate if the Senate yields to the pressure of the Department of Finance to raise the excise tax that would make local cigarettes beyond the rich of the poor smokers.
The Senate could have asked the anti-money laundering council how much ill-gotten money it has forfeited for the state. The senators will be told that billions upon billions of pesos have been collected from the money launderers. But the council does not talk about it.
I guess one reason is large sums were forfeited from powerful people. The effort against money laundering is gaining ground in spite of obstacles thrown by the courts.
In refusing to amend the anti-money laundering law to comply with a 2010 commitment, Senate President Juan Ponce Enrile was quoted in media as having said the Philippines will not be told what to do by the FATF.
Enrile’s stand for legislative independence is misplaced. The Senate is merely called upon to honor its commitment to prevent the country and its banking system from being a huge parking lot for stolen funds.
Little has it occurred to the Senate that under the program, only foreigners are allowed to make deposits under the Foreign Currency Deposit Unit. The money is considered part of secondary reserves and may be relent by the depository bank.
The dollar deposits made by then Chief Justice Renato Corona were considered as attempts to keep the money away from public knowledge, the funds not having been included in his statement of assets, liabilities and net worth.
The Senate, which may feel it finds itself in a bind between the law and the commitment to the FATF, may simply consider or weigh which part benefits the country most. Is it complying with the bank secrecy deposit law or is it keeping the reputation of this country as a democracy loathe to harbor money from thieves?
After all, the exchange of information is treated with the highest confidence. The banks that may have deposits suspected of being ill-gotten will not complain. Neither will the depositor.
If they do, they both expose themselves as parties to a fraud.
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email: amadomacasaet@yahoo.com

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