The country’s existing laws, including the Anti-Money Laundering Act of 2001 (AMLA), have “no teeth” to check money laundering and other financial crimes, the finance chief said.
Amid the controversy surrounding the influx of foreign currencies into the country, Finance Secretary Carlos G. Dominguez III admitted that the Department of Finance (DOF) has been calling attention to these “loopholes” in the financial system for years, describing AMLA as a “weak tool against money laundering and other unlawful activities.”
“They do this because they can. Our laws have no teeth to investigate and prosecute these activities effectively,” Dominguez said in his speech delivered on Friday following the awarding of ISO 9001:2015 Certification to the Bureau of Local Government Finance and oath-taking of local treasurers in Manila.
On Thursday, Senate Blue Ribbon Committee Chairman Richard J. Gordon said during a hearing that a total of 60 individuals brought in foreign currencies amounting to $633.029 million, or P32.02 billion, from September 2019 until Thursday, March 5, 2020.
The finance chief pointed out that tax evasion and other financial wrongdoings are not among the predicate crimes listed under the law and enable AMLC to examine bank accounts after securing a court order.
“This leaves us powerless in going after tax evaders and other criminals using funds for other illegal activities,” he said.
Aside from the gaps in AMLA, Dominguez recalled the DOF’s efforts in pushing for the lifting of bank secrecy law since 2016 but to no avail.
“In 2016, the Department of Finance has proposed a bold reform in Congress to penetrate the wall of confidentiality used to conceal ill-gotten money by lifting bank secrecy laws of suspected criminal cases. However, our legislators decided to table it for later discussion,” he said.
“We tried proposing it again to the tax amnesty bill. We passed the tax amnesty bill in February 14 last year but the president rightfully vetoed the grant of general tax amnesty due to the lack of provisions of lifting the veil of bank secrecy. Offering a general tax amnesty must come with the ability to verify whether those who availed of it, are not,” he added.
While they wait for these “crucial measures” to be enacted, Dominguez assured the public that they are working with government agencies and the AMLC by utilizing currently available tools to curb tax evasion and other questionable activities, such as the unrestricted influx of foreign currency into the country.
“Now more than ever, we will readily work with the legislature to advocate again for congressional approval of this crucial measure. We will, likewise, support the swift passage into law of the amendments to the AMLA to make sure that the Philippines will not be used as a money-laundering site for any unlawful activity,” he said.