450 SUSPECT BANK ACCOUNTS WORTH P1B FROZEN

Manila, March 18, 2003 -- At least 450 bank accounts containing a total of nearly P1 billion have been frozen by government regulators on suspicion that the money came from criminal activities, including terrorism.

A report by the Anti-Money Laundering Council, a copy of which was obtained by reporters, revealed that as of March 13, the AMLC has frozen a total of P954.392 million in peso deposits, $855,627 in dollar deposits and Y29,625 in yen deposits.

Investigations so far resulted in 34 criminal cases now in court, two of them for "terrorist-related activities." Two cases involved kidnapping, two involved drug trafficking, 11 involved estafa and 11 involved securities law violations, the report said.

The report covered the period after the enactment of the anti-money laundering law in September 2001 and before it was amended early this month to tighten controls on the flow of dirty money.

Ironically, the amendments to the law were now slowing down the AMLC because they now require the body to seek a court order before it can freeze funds, a council source told reporters.

"Now we have a problem. We can find out about these illegal activities but we will have no way of actually recovering the money unless we are cleared by the courts. And we all know this process could take long enough for the funds to disappear completely before we could do anything," the source said, speaking on condition of anonymity.

The amendments signed by President Arroyo on March 7 lowered the threshold for bank transactions to be investigated from the present P4 million to about P500,000.

The task force also sought a lifting of secrecy provisions that previously restricted the access of the Bangko Sentral ng Pilipinas (BSP) to account information.

The launder law was amended so the Philippines can avoid financial sanctions from industrialized nations. The Paris-based Financial Action Task Force (FATF) had given the Philippines until March 15 to amend the law or face sanctions.

It had ruled that the country's anti-launder law and the initial amendments made to it in February were insufficient to stop the flow of illegal funds.

The global money laundering watchdog blacklists countries it judges are not doing enough to block the flow of dirty money around the world. Such a move hurts the flow of investments and funds into an offending country.

In the Philippines' case, the remittances from seven million Filipino overseas workers crucial to the nation's economy might have been affected by the blacklisting.

The task force is made up of 31 industrialized nations, including the United States, European Union countries and Japan.

In a March 3 meeting with an FATF mission, Filipino lawmakers agreed to change the regulations that previously required the BSP to have court permission to gain access to suspect bank accounts, unless it involved cases of kidnapping for ransom, drug trafficking or terrorism.

However, the AMLC was stripped of its authority to freeze suspicious funds without prior court permission.

Of the 34 money laundering cases, two are now with the Supreme Court and 28 are already with the Court of Appeals. One case is with the Office of the Ombudsman, which investigates government officials and employees.

The AMLC received a total of 206 reports and letters alerting the watchdog of suspicious accounts, 117 of which are still being investigated by the body.

The White House praised the newly amended anti-money laundering law, saying it would be "an important tool" in the war on terrorism.

"In a world in which terrorism and criminality are so closely linked, strong anti-money laundering regimes are more important now than ever before," it said in a statement. (By Des Ferriols, Star)


Reported by: Sol Jose Vanzi

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