IN the previous column, we discussed the definition of money laundering and how criminals go about the “laundering” process of turning their dirty money into clean cash.

The Financial Action Task Force (FATF), the international body established to fight money laundering and terrorist financing on a global scale, stressed that the economic and political influence of criminal organizations could weaken the social fabric, collective ethical standards, and the democratic institutions of society.

The FATF also pointed out that criminal influences could likewise undermine countries’ efforts in transitioning to democratic systems.

Money laundering is inextricably linked to the underlying criminal activity that generated it.

Laundering, the FATF emphasized, enables criminal activity to prosper.

So what is the Bangko Sentral ng Pilipinas doing about money laundering?

In order to implement its continued commitment and support of the global fight against money laundering, the BSP has issued a number of measures to bring the Philippines’ regulatory regime on money laundering closer to international standards.

In September 2001, Congress passed the Anti-Money Laundering Act (AMLA) of 2001.

The legislation, among others, defined money laundering as a criminal offense, prescribed penalties for such crimes committed, and formed the foundation of a central monitoring and implementing council called the Anti-Money Laundering Council (AMLC).

The AMLC is composed of the Governor of the Bangko Sentral as Chairman and the Commissioner of the Insurance Commission and the Chairman of the Securities and Exchange Commission as members.

In March 2003, the amendments to the AMLA were signed into law to address concerns such as the high threshold level for covered transactions, the coverage of “covered institutions,” and the existing Bank Secrecy Law.

The amendments included the following:

a) lowering the threshold for covered transactions from P4.0 million to P500,000;

b) authorizing the BSP to inquire or examine any deposit or investment with any banking institution without court order in the course of a periodic or special examination; and

c) removing the provision prohibiting the retroactivity of the law.

In October 2003, the Philippines’ amendments to the AMLA were evaluated by the FATF and were found to be compliant with international standards.

The AMLC is presently a member of the Egmont Group, the global network of Financial Intelligence Units (FIUs) against money laundering and terrorist financing.

This membership has made the Philippines an equal partner in the global fight against money laundering and terrorist financing.

As part of the Egmont Group, the AMLC is given free and unlimited access to a wealth of financial data contained in the databases of all the FIU-members of the group.

As the FATF has emphasized, money laundering is indeed a threat to the good functioning of a financial system.

However, it can also be the Achilles heel of criminal activity.

Zeroing in on the money laundering aspect of criminal activity and dispossessing the criminal of his ill-gotten wealth means hitting him where he is vulnerable, according to the FATF.

Divesting the criminal of his usable profit means stopping him from committing more crimes.


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