The Senate has started plenary discussions on the bill that would strengthen the country's Anti-Money Laundering Act in accordance with the recommendations of the international watchdog Financial Action Task Force (FATF).
Senator Grace Poe, chairman of the Senate banks and financial institutions committee, sponsored on Wednesday Senate Bill No. 1945.
The bill, contained in Committee Report No. 149, consolidates two measures filed by Poe and Sen. Imee Marcos on AMLA amendments, including inputs raised by stakeholders, and Senate President Pro Tempore Ralph Recto, Senate Minority Leader Franklin Drilon, and Sens. Sherwin Gatchalian and Cynthia Villar during the committee hearings.
"Before us is an important measure that requires our immediate attention. We are implored to immediately act on it by the Asia Pacific Group on Money Laundering, 'as a form of national economic emergency, due to the very serious economic costs' arising from non-compliance," Poe said in her sponsorship speech.
"This measure, which seeks to further amend the Anti-Money Laundering Act of 2001, was crafted as a response to the key findings of the mutual evaluation report or MER which evaluated our compliance with the 40 recommendations of the FATF," she added.
Among others, the bill includes real estate developers and brokers as covered persons "because of the fact that real estate activities are widely used as a front for money laundering and terrorism financing all over the world."
She said they would be covered when they engage in a single cash transaction in excess of P5 million or its equivalent in any other currency.
The bill also sought to cover Philippine offshore gaming operators (POGOs) and service providers.
Poe said the violation of tax laws and the Strategic Trade Management Act, which relates to the proliferation of weapons of mass destruction and its financing, as predicate offenses to money laundering.
The bill set the threshold at P50 million and above, but Poe said there should be a finding of fraud or malicious and willful misrepresentation on the part of the tax violator.
The Senate banks committee also strengthened the functions of the Anti-Money Laundering Council (AMLC), by:
(1) enhancing its investigative powers through express powers of deputization, power to apply for search warrant, and power to obtain information on ultimate beneficial ownership;
(2) authorizing it to implement targeted financial sanctions on proliferation financing;
(3) authorizing it to preserve, manage or dispose assets subject of asset preservation order and judgement forfeiture; and
(4) prohibiting the issuance of injunctive relief against freeze orders and forfeiture proceedings under its jurisdiction.
Poe said they did not grant the AMLC's request for the grant of subpoena powers.
"We didn't give too much power to the AMLC because some of those things might be in violation of our basic rights," she said.
Poe appealed to her colleagues to pass the bill as soon as as possible, being certified as an urgent measure by President Duterte.
Senate President Vicente Sotto III, however, said that according to the chamber's rules, the President's certification does not apply to substitute bills.
Duterte must issue a separate certification for SB No. 1945, he said.
If signed into law, senators noted that this would be the fifth time that the AMLA would be amended following recommendations from the FATF.
Government finance managers had warned that the Philippines might be included in "grey-listed" or the high risk and non-cooperative countries if it fails to implement reforms to the AMLA.
The FATF extended the deadline from October, 2020 to February, 2021 due to the COVID-19 pandemic.
"Being on this list is a very strong signal to market participants and regulators globally. It has implications which we must avoid as much as we can, especially during the time of a global pandemic," Poe said.