THE Senate investigation of the entry of illegal money into the country allowed senators to pinpoint loopholes in the country’s banking laws that should be corrected to stop attempts to launder dirty money in the Philippines.
Senator Sergio “Serge” Osmena 3rd, Blue Ribbon committee vice chairman, said the hearings on the $81 million money laundering scandal helped them identify loopholes in the Bank Secrecy law, General Banking Act and the Anti-money laundering act (AMLC) as well as the Foreign Currency Deposit Unit (FCDU).
Osmena however did not mention what particular provisions in these laws he wants to amend but noted that revisions are needed to correct these flaws and prevent a similar incident from happening.
“We were able to pinpoint a lot of loopholes in the laws. We can start already formulating, drafting bills that will correct these loopholes. This [money-laundering] will happen again if we will not correct the loopholes,” Osmeña said in an interview.
As for the possible repeal of the bank secrecy law, Senator Paolo Benigno Aquino 4th said such a proposal should be studied carefully because any revisions would have serious effects on the banking system.
“Coming from the hearings, it is likely that the Bank Secrecy and AMLA laws will need to be strengthened, ”Aquino said in an interview.
Senator Teofisto Guingona 3rd, chairman of the Blue Ribbon panel, does not favor the lifting of bank secrecy but he is willing to support amendments to the law.
Guingona explained that bank deposits are confidential, however there are some exceptions, and that is where Congress can introduce amendments.
Republic Act 1405 or the law on the secrecy of bank deposits declares bank deposits confidential including investments in bonds issued by the Government of the Philippines, its political subdivisions and its instrumentalities.
Deposits can only be examined or looked into if there is a written permission from the depositor; if the owner of the account is facing an impeachment complaint; when there is an order of a competent court in cases of bribery or dereliction of duty of public officials; and in cases where the money deposited or invested is the subject of litigation.
Adding exceptions on fictitious bank accounts could somehow ease the law on bank secrecy, Guingona said.
“We should add more exceptions [on bank secrecy]and I think this is clear that fictitious accounts should be included in the exceptions,” he said.
The $81 million stolen fund from Bangladesh Bank was deposited in four fictitious accounts at the Rizal Commercial Banking Corporation (RCBC) Jupiter branch.
But even if these were proven to be fictitious, bank officials repeatedly declined to discuss details of the deposits under the names of Michael Francisco Cruz, Jessie Christopher Lagrosas, Alfred Santos Vergara and Enrico Theodoro Vazquez because of the Bank Secrecy law.
Senate president pro-tempore Ralph Recto said that bank protocols should also be looked into.
Recto said officials could have prevented the 19 junket players at Solaire Resort and Casino from leaving the country had the Anti-Money Laundering Council (AMLC) acted swiftly after learning about the entry of the $81million in the country.
AMLC executive director Julia Bacay-Abad admitted that they did not immediately coordinate with the Philippine Amusement and Gaming Corporation (Pagcor), the regulator of the casinos.
The AMLC learned about the stolen fund on February 11 after the Bangladesh Bank sought the help of Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr.
But it took the council more than two weeks to secure a freeze order from the court on the accounts involved and several days for it to coordinate with Pagcor.
“We did coordinate with PAGCOR but considering PAGCOR and the casinos are not covered institutions, we were of the impression that we cannot require them to submit any transaction,” Abad told senators.
But Recto pointed out that the AMLC and Pagcor could have exchanged information about the stolen money.
“You already knew that there was a huge amount of money that entered the country and went to the casinos why did you not talk to Pagcor?” the senator said.
Abad said the AMLC immediately asked the Court of Appeals to allow the agency to look into the accounts involved, including the accounts of Bloomberry, the operator of Solaire.
“So we were able to trace where the money went,” she added.
Solaire took action on March 10 and stopped a group of junket players who were playing in the casino.
According to Solaire representative Benny Tan, they confiscated the chips in the possession of these players.