Bicameral panel approves stricter ‘dirty money’ rules

THE BICAMERAL Conference Committee on Tuesday approved the bill strengthening the anti-money laundering law, although a key amendment pushed by Malacañang was not included in the final version.

The panel on Tuesday reconciled House Bill No. 7904 and Senate Bill (SB) No. 1945 which amends Republic Act No. 9160 or the Anti-Money Laundering Act (AMLA) of 2001, to comply with the recommendations of the Financial Action Task Force (FATF) to avoid being gray-listed.

The bills had included tax crime as a predicate offense to money laundering. However, the House contingent agreed to adopt the Senate’s proposal to set the tax crime threshold to excess of P25 million, Quirino Rep. Junie E. Cua, chairman of the House Banks and Financial Intermediaries Committee, said by telephone.

Under the House version, the threshold for tax crimes was set at P20 million, which was backed by President Rodrigo R. Duterte in the Dec. 15 notice certifying SB 1945 as urgent. The Senate did not use the said certification due to certain conditions imposed by Malacañang.

The bicameral panel also agreed to require the submission of reports on all real-estate transactions involving an excess of P7.5 million to the Anti-Money Laundering Council (AMLC).

Both bills originally proposed P5 million, much higher than the initial proposal of P1 million. The real-estate industry had earlier opposed the P1-million cap, saying this will affect investments.

“Inadjust namin ng konti to make sure na hindi maging burden sa industry (We adjusted it a bit to make sure it will not be a burden to the industry),” Mr. Cua said.

‘NOT A DEAL BREAKER’
AMLC Executive Director Mel Georgie B. Racela said they are satisfied with the approved version, noting the increase in the tax crime threshold should not be seen as a “deal breaker.”

“The raising of the threshold for tax crimes from P20 million to P25 million should not be a deal breaker because the FATF is looking at ‘serious tax crimes’ to be included as predicate crimes,” he said in a phone message.

“If the P25-million threshold is what Congress thinks as what constitutes serious tax crimes, then we will respect their position.”

He added while the bicameral panel raised the single transactions cap for real estate brokers and developers, the sector’s inclusion among the covered persons is “great news.”

“The P7.5-million single cash transaction is merely a bonus because there are other equally important obligations that the sector will have to fulfill just like the other covered persons such as banks, money changers and remittance companies to name a few, namely the conduct of KYC (know your customer), suspicious transaction reporting and record keeping obligations,” Mr. Racela said.

POGOS INCLUDED
The measure will also now include Philippine offshore gaming operators (POGOs) and their service providers among the covered persons.

Moreover, the bicameral panel retained the House provision granting the AMLC investigative powers available to other law enforcement agencies as well as subpoena powers. The House bill also allowed the AMLC to conduct search and seizure.

“May powers na ganu’n pero kailangan consistent with the provision of the Constitution na dadaan sa korte (The powers are included but it should be consistent with the Constitutional provision that it will go through the courts),” Mr. Cua said.

Mr. Cua said the AMLC will also be authorized to implement targeted financial sanctions in relation to the proliferation of weapons of mass destruction and its financing.

The FATF has given the Philippine government until Feb. 1 to enact and implement the changes to the AMLA, in accordance with its standards against money laundering and terrorist financing. The initial deadline was originally set in October 2020, but was extended due to the coronavirus pandemic.

“I think this agreement, this meeting of minds will ensure that we are not gray listed,” Mr. Cua also said.

Mr. Cua said the bill will likely be ratified by the House on Wednesday.

Senator Grace S. Poe-Llamanzares also confirmed the approval during Tuesday’s session. “They adopted a lot of the versions of the Senate. We had a few issues we had to resolve and we made a very good and just compromise,” she told senators.

Failure to enact and implement the AMLA amendments puts the Philippines at risk of being gray-listed. Ms. Poe-Llamazares said Filipino nationals and businesses abroad may be subjected to enhanced due diligence, resulting in additional cost, higher interest rates and processing fees.

The Philippines was removed from the FATF’s gray list in February 2005, five years after its inclusion in 2000.