CONGRESS OKs SELECTIVE LIFTING OF BANK SECRECY LAW

Manila, July 7, 2003 By Des Ferriols (Star) The implementing rules and regulations approved by Congress for the amended Anti-Money Laundering Act provide for the selective lifting of the Bank Secrecy Law. The provision allows the Anti-Money Laundering Council (AMLC) and the Bangko Sentral ng Pilipinas (BSP) to examine bank deposits and investments in the course of their investigation of suspected money laundering activities and other crimes specified under the AMLA.

The IRR, which has been approved by the Congressional Oversight Committee (COC), lays the parameters for the implementation of the AMLA and its subsequent amendments as pushed for by the Paris-based Financial Action Task Force (FATF).

The IRR authorizes the AMLC to file an ex parte application for the issuance of a freeze order if, after an investigation, the council determines that funds or properties are in any way related to any illegal activities covered by the AMLA.

Considering the "intricate and diverse web of related and interlocking accounts," the rules also allow the AMLC to ask the Court of Appeals for an order to freeze the main property and bank accounts in the names of its owners or holders, as well as other related accounts.

Such a freeze order, under the AMLA IRR, will be effective for 20 days, but this period may be extended upon application for such an extension by the AMLC.

Under Rule 10.4 of the IRR, related accounts are defined as those accounts originating from or related to the funds or properties named in the freeze order.

After verification by the covered institutions that the related accounts originated from the monetary instrument or property subject to the freeze order, the IRR requires banks to freeze these accounts "wherever these may be found."

Once frozen, these accounts cannot be unfrozen without securing official confirmation from the AMLC.

The IRR also gives the AMLC authority to inquire into bank deposits under rule 11, which exempts the council from the Bank Secrecy Law.

Under Rule 11, the AMLC could inquire into or examine any particular deposit or investment with any bank or non-bank financial institution upon the order of any court when the case involves a specific AMLA violation.

Under the IRR, the AMLC only needs to establish "probable cause" that the deposits or investments are involved in illegal acts covered by the AMLA. Furthermore, the council need not secure a court order to inquire into deposits and investments if the accounts in question are believed to contain the proceeds from kidnapping for ransom, illegal drugs and hijacking all heinous crimes.

The BSP can also look into deposits and investments in the course of its periodic or special examination. This is an additional exception to the Bank Secrecy Law.

"Any findings of the BSP, which may constitute a violation of any provisions of this act, would be transmitted to the AMLC for immediate action," the IRR states.

Under the IRR, penalties for money laundering include imprisonment of seven to 14 years with a fine not less than P3 million, but not more than twice the value of the monetary instrument or the property involved in the offense.


Reported by: Sol Jose Vanzi

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