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Deficiencies of our AMLA

(Article published in the Feb 29,2012 issue of Manila Standard Today)  

Lucky for Chief Justice Renato C. Corona, our Anti-Money Laundering Law (R.A. No. 9160, as amended by R.A. No. 9194, or “AMLA”) is severely restricted and not compliant with international standards and best practice, otherwise, he would be in deep you-know-what.

The defects of our AMLA were pointed out, to our national embarrassment, by the joint Assessment Team from the World Bank and the Asia/Pacific Group (APG) on Money Laundering in its Mutual Evaluation Report which was adopted by the APG in its Plenary Meeting last July 8, 2009, or almost three years ago.  They need to be addressed right away.

For instance, our definition of the crime of money laundering recognizes only three modes of commission: (1) knowingly transacting or attempting to transact the money sought to be hidden; (2) knowingly facilitating such transaction or attempt at transaction; and (3) knowingly failing to disclose to the AMLC such transaction or attempt at transaction. Clearly, the obsession is with “transacting or attempting to transact” the money sought to be laundered, and no other.  Specifically, outside of what present law considers criminal money laundering are acts, such as the (a) conversion, (b) transfer, (c) disposition, (d) movement, (e) acquisition, (f) possession, (g) use, (h) concealment, and (i) disguise of the proceeds of the predicate crime. 

As a result of this restricted definition of money laundering, Chief Justice Renato C. Corona cannot now be accused of money laundering even if he undeniably withdrew from the Philippine Savings Bank on December 12 last year, which was the very day that he was impeached by the House of Representatives, over thirty million pesos in deposit accounts in his name for, say, the purpose of hiding the same from the praying eyes of civil society. 


Had our country, however, heeded to the full Recommendation No. 1 of the Financial Action Task Force (FATF) to criminalize money laundering as so defined by the Vienna and Palermo conventions of which our country is a party, his same withdrawals of said deposits would have suffered the stigma of money being laundered, since by so making said withdrawals he undoubtedly transferred, moved, concealed, and disguised amounts that could not be adequately accounted for as having come to him by way income from duly reported legal sources, and, hence, ill-gotten.

The Vienna and Palermo conventions have identical proscriptions of acts that are mandated to be by law considered money laundering. Article 3 of the Vienna Convention of 1988 demands that its parties criminalize “the conversion or transfer of property ... for the purpose of concealing or disguising the illicit origin of the property...” Article 6 of the Palermo Convention of 2000, for its part, also requires its signatories to make criminal “the conversion or transfer of property ...for the purpose of concealing or disguising the illicit origin of the property...”  In disregard of our international commitments, our law criminalizes only “transacting and attempting to transact” dirty money.  Hence, Chief Justice Renato C. Corona can go scot free—from money laundering, at least for now.

Aside from Chief Justice Renato C. Corona, there are other lawbreakers who are also beneficiaries of our very restricted anti-money laundering law.  Our AMLA mentions only thirteen specific predicate offenses, i.e. offenses the proceeds from which are to be considered unclean money.

Not included in our list of predicate offenses are acts which the rest of the world considers as serious evils to be extirpated.  These crimes which we, at this time, still fail to consider as money laundering’s predicate offenses are, to wit, (a) participating in an organized criminal group and racketeering; (b) terrorism, including terrorist financing; (c) trafficking in human beings and migrant smuggling; (d) sexual exploitation, including sexual exploitation of children; (e) fraud; (f) counterfeiting currency; and (g) environmental crimes.  Criminals committing any of the foregoing crimes are not, to date, considered money launderers even if they were to transact or attempt to transact the proceeds from any of the above crimes.

Not only is our law, as shown above, below international standards in terms of depth by virtue of the few acts considered as money laundering as well as in terms of the breadth of the number of crimes that are considered predicate offenses, our AMLA is also deficient in the grant to our Anti-Money Laundering Council (AMLC) of the powers that it needs to do its job. 

For instance, the AMLC must first prove “probable cause” that money is indeed related to an unlawful activity before it can be convince the court to issue a freeze or other provisional asset preservation order in a civil forfeiture case.  The reality on the ground, however, is that, very often, at the time the AMLC gets wind, through a covered transaction or suspicious transaction report, of money laundering, the quantum of evidence required to establish “probable cause” is not yet in the hands of the AMLC.  It needs time to complete its investigation.  During the interregnum that is needed to assemble facts to prove probable cause, (a period which could fortunately be short or, on the other hand, be unfortunately too long depending on the complexity of each case) the unclean money has an opportunity to fly the coop.

Moreover, our AMLA’s list of persons who are conscripted to report possible money laundering to AMLC is woefully incomplete.  We do not impose reporting obligations on casinos, real estate agents, dealers in precious metals and in precious stones, lawyers, accountants, and other independent professionals, trust and company service providers, all of whom are in vantage positions to help spot money laundering in the offing.  These professionals and corporate entities, being as they are the veritable gatekeepers of our common domicile and the logical guardians of the community well of our welfare, ought to shoulder part of the burden of protecting our currency flow from being contaminated or polluted by unclean money.  After all, they, like banks and those entities presently covered, are direct beneficiaries of our effective money laundering regime.

        All these failings, --and more-- in our present law, Senate Bill No. 2484 authored by Senator Sergio Osmena III, seeks to remedy.  I do hope that Congress makes time to pass it, soon.  Otherwise, by the default of our leaders, our entire country of followers is likely to suffer.