Abusing the Expanded AMLA
The Anti-Money Laundering Act (AMLA) which paved the way for the creation of the Anti-Money Laundering Council (AMLC) was an important piece of legislation that was crucial to our compliance to the requirements of the Financial Action Task Force (FATF), a Paris-based inter-governmental agency which combats money laundering, terrorist financing and other threats to the integrity of the global financial system. If blacklisted by the FATF, Philippine-based transactions would face increased scrutiny which could result in higher transaction charges and delayed remittances of Filipinos working abroad. Following the enactment into law of the AMLA, the AMLC was established; it now functions as the highest policy-making body and lead agency with respect to the implementation of the Philippine AML regime.
After its initial assessment of the law, however, the FATF found our AMLA inadequate, which caused the Philippine Congress to make amendments during the 15th Congress. My primary concern then as Minority Floor Leader was that its power, particularly those concerning the opening and freezing of accounts of suspected violators of the law, can be readily abused if the wrong people with weak morals and with strong recognition of political indebtedness were placed at the helm of the AMLC. Imagine the head of AMLC having vested interests and using his powers to freeze accounts of rival businessmen, or worse, being aligned with certain politicians and using his powers to malign their opponents.
For this reason, I remember vigorously debating all the way from the House of Representatives to the Bicameral Conference Meeting of the Senate and House, for the inclusion of a safety net proviso stating that the opening and freezing of accounts should require three signatories: the AMLA Head, the BSP Head, and the Insurance Commissioner. However, this input was struck down by administration allies in both houses. As it stands, only the nod of the AMLC Head is needed through the Solicitor General, to file a petition for a freeze order. The maximum duration of a freeze order is six months which does not even require that a case for any of the predicate crime is filed to substantiate it. In other words, your account can be frozen for six months upon mere suspicion. This lack of a safety net is now being clearly abused to give undue advantage to the presumptive candidate of this administration.
Clearly, the opposition of administration allies to the inclusion of the safety net I advocated for is now being used to their advantage; and what I presented as foresight then is now being played to the hilt at the present. Besides the abuse of the freezing of bank accounts, I also want to underscore that there is the strict provision of the AMLA on confidentiality which has also been used to publicly discredit political opposition to this administration. The law provides that court proceedings of this nature are deemed highly confidential and any party who discloses it is subject to contempt. The wisdom and intention of the law, of course, is to protect innocent parties from damage to their name and reputation. It is within this context that the current top opposition candidate for the presidential elections next year is being systematically vilified, and I strongly agree that it is very unfortunate that the intent of the Anti-Money Laundering Act has been subverted by politics. The objective of the AMLA was to prevent the use of the Philippines as a haven for laundering money from drugs, terrorism and other unlawful acts. Sadly today, it has become a powerful tool to harass and besmirch the reputation of this administration’s political enemies.